PFAS ex­pect frame­work, ef­fi­ciency, safety for N2trn pen­sion-driven hous­ing fund

… as FG plans to de­velop 300,000 homes in 12 months


For Nige­ria to suc­cess­fully build its way out of eco­nomic down­turn through mass hous­ing and road con­struc­tion us­ing funds from the pen­sion in­dus­try, it would have to set up a pri­vate sec­tor-driven struc­ture that would guar­an­tee a re­turn on in­vest­ment for pen­sion con­trib­u­tors, play­ers in the pen­sion in­dus­try have said.

For the pen­sion in­dus­try to chan­nel its funds to gov­ern­ment projects like roads and mass hous­ing, the The play­ers ex­pect that planned project should be the type that meets some of their in­vest­ment stan­dards and would have a struc­ture that makes the funds safe.

“We want ef­fi­ciency, safety and the right pric­ing so that pen­sion con­tri­bu­tions that would be in­vested in the hous­ing project will come back with in­ter­est,” Oguche Agu­dah, Chief Ex­ec­u­tive Of­fi­cer, Pen­sion Fund Op­er­a­tors As­so­ci­a­tion of Nige­ria (PENOP), said, adding that there has been an on-go­ing dis­cus­sion on the pen­sio­nen­abled hous­ing de­vel­op­ment.

Ac­cord­ing to him, “we are okay with the fact that gov­ern­ment wants to pro­vide homes for Nige­ri­ans,” but if the ini­tia­tive is go­ing to be suc­cess­ful, the pri­vate sec­tor is the best op­tion.”

As a way to avert the postCOVID-19 re­ces­sion await­ing Nige­ria’s oil-de­pen­dent econ­omy, the Eco­nomic Sus­tain­abil­ity Com­mit­tee (ESC), chaired by Vice Pres­i­dent Yemi Os­in­bajo, rec­om­mended a mass hous­ing pro­gramme ex­pected to de­liver up to 300,000 homes an­nu­ally.

The hous­ing project along­side an ex­ten­sive pub­lic works and road con­struc­tion pro­gramme that will be fo­cus­ing on both ma­jor and ru­ral roads are ex­pected to shield the al­ready trou­bled Africa’s largest econ­omy from tak­ing more hit from the pan­demic.

To fund the project that will close 1.5 per­cent of Nige­ria’s hous­ing deficit of more than 20 mil­lion units, the Fed­eral Gov­ern­ment plans to raise about N2 tril­lion long term cap­i­tal from the pen­sion in­dus­try.

Ex­plain­ing how pen­sion fund can be ac­cessed, Peter Agha­howa, Head of Cor­po­rate Com­mu­ni­ca­tions De­part­ment at Na­tional Pen­sion Com­mis­sion (Pen­com) said “if gov­ern­ment is com­ing out with an in­stru­ment and the PFAS sees it as a good in­vest­ment, then they should be able to put in their funds as long as “it meets the in­vest­ment guide­lines set up by the reg­u­la­tor.”

Ac­cord­ing to Agha­howa, the pen­sion in­dus­try is one that is highly reg­u­lated and, as such, “the in­vest­ment has to be al­low­able and should be able to offer good re­turns.”

Mean­while, in­dus­try sta­tis­tics es­ti­mate, in mon­e­tary terms, that Nige­ria’s prop­erty in­dus­try with one of the low­est home­own­er­ship rates in Africa re­quires be­tween N170tril­lon to N200tril­lion to bridge the con­ser­va­tive 17mil­lion hous­ing de­mand-sup­ply gap if each hous­ing unit is to cost N10mil­lion.

Be­fore the early ef­fect of COVID-19 slowed Nige­ria’s hous­ing in­dus­try, its low­est level in two years at -4.57 per­cent as of March 31, 2020, ac­cess to af­ford­able hous­ing in Nige­ria was crip­pled by lack of non-func­tion­ing mort­gage sys­tem, high cost of prop­erty de­vel­op­ment buoyed by the coun­try’s ar­chaic Land Use Act, among other fac­tors.

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