The Federal Executive Council (FEC) has introduced a groundbreaking mortgage scheme aimed at alleviating the financial burdens on Nigeria’s poorest and most vulnerable citizens.
Minister of Finance and Social Welfare, Wale Edun, unveiled the details of the new policy during a post-FEC meeting press briefing, emphasising its role in countering the adverse effects of ongoing macroeconomic reforms and fiscal policies.
Edun acknowledged the current high interest rates, which hover around 12%, making mortgage payments and home purchases unaffordable for many Nigerians.
He emphasised the government’s commitment to creating a more affordable and sustainable mortgage system through collaboration with key stakeholders.
“Where we are now, interest rates are elevated; there are not the kinds of rates that someone who’s trying to pay a mortgage or trying to pay for the purchase of a house can afford both in terms of the tenure of the mortgage. We’re talking about give or take 12 per cent,” Edun explained.
The minister highlighted the critical role of various financial and institutional stakeholders in the scheme.
These include the Nigerian Sovereign Investment Authority (NSIA), the Federal Mortgage Bank, pension funds, investment funds, and insurance funds. The aim is to leverage these long-term pools of money to make housing more affordable.
“We need the creativity of all stakeholders—the government, private sector, federal housing authorities, the Nigerian Sovereign Investment Authority, the Federal Mortgage Bank, the Ministry of Finance Incorporated, and the pension and insurance funds.
“The whole ecosystem must come together to make housing affordable. This sector is ripe for value-added employment and economic growth,” he stated.
Edun also mentioned that the scheme will involve innovative financial vehicles, likely managed by the Ministry of Finance Incorporated and the NSIA, to ensure that long-term funds held by institutional investors are channelled effectively into mortgages and housing construction.
“When you say what type of funding it will be, clearly in the main padded funding, there will be intermediation; I mean, there will be passing, so the long-term funds that are in the hands of the institutional investors will be made available through vehicles, probably through the ministry of finance incorporated or for mortgages, and through the national sovereign investment authority for housing construction,” Edun added.
