JUMADA-AWWAL 7, 1429 A.H.
TUESDAY, MAY 13 2008
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NLC and the National Housing Fund Scheme
By M .B . Sabo
What the management of Federal Mortgage Bank of Nigeria was able to mobilise the entire leadership of the Nigeria Labour Congress to a consultative/interactive workshop in Bauchi on the 7th & 8th April was a remarkable achievement and a dawn of a new era in the embattled story of the National Housing Fund.
In an address on the occasion, which was attended by the minister of State for Environment, Housing and Urban Development, Mr. Chuka Odom; deputy governor of Bauchi State, Alhaji Lateef Jakande; the chairman of REDAN and other stakeholders, the president of the Nigeria Labour Congress, comrade Abdulwaheed Ibrahim Omar, gave an impassionate speech, dwelling on the scheme’s failures and successes. Though belated, the session was nevertheless a welcome development.
Ideally, the NHF Act is supposed to be worker friendly. The scheme targets lower and middle income workers. Hinging on this perception, Comrade Abdulwaheed took a hard swipe on the scheme. He accused the Federal Government of not contributing to the fund regularly and failing to appoint labour representative on the board of FMBN. He rightly observed how difficult it is for Nigerians to obtain valid titles. He also frowned at banks and insurance companies for refusing to contribute to the scheme as provided by the law. The comrade’s criticism were certainly in the bank’s interest.
The bank did not escape the scathing bashing of comrade chairman. He observed that, ‘it is impossible for the NLC to overlook the failure of the fund to provide contributors with detailed records of contributions and interest.’ He questioned if the bank ever refunds the contributions of the retired or deceased. He called on FMBN and the Primary Mortgage Institutions (PMIs) to reduce bureaucrat bottlenecks that unduly procrastinate the processing of applications.
For us in FMBN, the Bauchi forum has brightened our chances of an enduring partnership with labour. The NLC president was quoted as saying, ‘I assure you that the NLC will remain committed and diligent in this emerging partnership because it has the potentials to benefit the working people and the poor.’ Unlike the past approach of zero cooperation, the NLC promised flexibility in its future relationship with the bank.
Since the commencement of the reform in FMBN, the bank has registered significant achievements in the provision of housing and our modest scorecard can bail us out. We came to the consultative workshop with labour on a higher moral ground. Since labour is not interested in dogon turanci, (long grammar) what then is our scorecard?
As Comrade Abdulwaheed rightly observed, the Bank has done commendably well in financing the production of houses by estate developers and State Housing Corporations. This window which was hitherto underutilised has produced over 19,455 housing units with an aggregate loan of N22.8billion. This investment on housing production means job creation and a boom in the building materials market.
Similarly, the bank has as at March 2008 disbursed N12.5billion as individual/PMI loans. The beneficiaries of these loans are all NHF contributors and mostly workers. Non-contributors are not allowed to access the fund. As at December 2007, over 18,576 contributors have accessed the loan, which means that number of houses are either built or bought. The NHF loan attracts only 6% interest and that is a give away in the Nigeria financial market.
FMBN intervention to pay off for the beneficiaries of owner occupier scheme is widely commended by stakeholders. We wouldn’t forget in a hurry the bank’s intervention with regards to the sales of federal government houses. In Adamawa State, the bank spent over N350m to pay for the beneficiaries of owner occupier scheme. Similar cases can be found nationwide. Contrary to Comrade Abdulwaheed’s ‘doubts’ regarding refund of NHF contributions, the bank has since inception refunded N678 million to 42,441 beneficiaries. Since the reform, all genuine refund cases are settled within two weeks with interest (2%) and the process has been decentralised to state offices.
In terms of documentation which the labour leadership expressed concern, the bank has been able to register 19,352 employers with 3,693,788 contributors as at January 2008. Over 1,897,720 passbooks have been issued with corresponding employer/contributor ledgers. The bank has issued employer/employee statements of account to thousands of organisation/individuals. But a lot needs to the done on this issue and both employers/labour can assist the Bank to perfect documentation.
Our successes have now made us the attractive bride. PMIs and estate developers see in us a viable and formidable partner in housing finance. Some progressive wing of the labour leadership have since given us a chance to prove ourselves and as result about 20 states have rejoined the scheme from only three in 2004. We are hopeful that the proactive, principled but flexible leadership of Comrade Abdulwaheed would led labour once again to participate fully jn the scheme.
The reform has helped to eradicate bottlenecks which resulted increase in collection. State offices were empowered and with better working tools/environment, NHF collection has significantly risen. Though the bank is yet to hit its optimal collection, its collection now stands at N32, 736,576,566.
To allay the fears of labour, especially Comrade Abdulwaheed, the reformed FMBN has discarded the bureaucratic bottleneck that has weighed it down in the past. It is encouraging the PMIs to expedite action on NHF loan applications while adhering to the underwriting standards lay down by the bank. The bank is now committed to service delivery.
The reform has introduced series of policies to reposition the bank to perform a robust mortgage finance system. NHF has been revitalise and now widely accepted as a cheap source of housing finance, bills were sent to the National Assembly to remove restrictive legal and legislation environment, to include labour on the board of trustees of the bank, extend the loan repayment period from 25 to 30 years, introduced multiple lending windows besides NHF such as, private housing estate development, state housing corporations and housing cooperatives, increased lending rate to N5million from N1.5million, lowering of interest rate from 9% to 6% for contributors, lowering of interest rate from 5% to 4% to PMIs. PMIs can now use acceptable securities to access NHF loan besides ‘block of existing mortgages.’ The reform was intended to ease access to mortgage loan by Nigerians.
It may delight Labour to note that, their toiling colleagues in the bank have improved remunerations after the reform. The bank sponsors both local and foreign training and many staff have acquired their own houses through NHF. With the restructuring and new employments the bank’s internal dynamic has become more proactive. The Bank’s corporate image has also greatly improved.
However, as the officials of the bank observed in the Bauchi forum there is still room for improvement. There is need to improve the bank’s IT system so as to enable customers to register and access their account on-line. Contributors/employers must be availed their statements of accounts on request. The bank’s effort to access capital in the capital market is yet to materialise 2 years after. There is also need for continuous enlightenment in order to combat misconceptions and expand frontiers of NHF activity. The bank must double its effort to meet peoples’ expectations.
The NLC, trade unions and public/private sector officials must help FMBN/NHF to accomplish its mission. This is a national call. We have despites all odds proved relevant and compared to our peers a very accountable organisation. The scheme is for now the only viable and cheap source of housing finance in Nigeria. Given all the encouragements and cooperation FMBN will not renege from its motto of ‘…housing the nation.’
•M .B . Sabo is the Zonal Coordinator (North East) of the Federal Mortgage Bank of Nigeria, Maiduguri
