Deepen mortgage culture - Fashola tells FG

... As Governor hosts Senate Committee on Land, Housing and Urban Development
Lagos State Governor, Mr. Babatunde Fashola (SAN), Monday advised the Federal Government to deepen the mortgage culture in the country, concentrate on research and development as well as education to improve building methods as a key strategy towards solving the nation’s housing problem.
Fashola, who spoke at the Lagos House, Ikeja, while playing host to the Senate Committee on Land, Housing and Urban Development which paid him a courtesy visit, said deepening the mortgage culture would enable Nigerians obtain loan that they could pay within the productive period of their life at a less cumbersome interest rate.
He told the Committee, led by its Chairman and first Governor of Yobe State, Senator Bukar Abba Ibrahim, “In my own humble view, what the Federal Government needs to do is to assist in solving the housing problem is first to deepen the mortgage culture. Nigerians know how to build houses. What is really the problem is that they can’t afford to buy it”.
“So how people can get a loan that is tied to their productive period of life at interest rate that will not kill them is what the Federal Government should concentrate on”, the Governor said adding that the Federal Government should also concentrate on research, development and education to improve building methods.

Pointing out that mortgage would enable people to pay for built houses, the Governor further explained, “One of the ways to energize the Housing Industry is to stimulate the real and effective demand for Housing backed by the ability to pay. If there is mortgage, people will build, private companies are already building”.

Commenting on the plan by the Federal Government to build a skill acquisition centre in each of the 36 states of the country and the Federal Capital Territory, the Governor said it would not amount to much as the products would not even be enough to satisfy the needs of a state. According to the Governor, the Lagos State Government already has 29 of such centres which are already churning out thousands of skilled artisans but not yet enough to satisfy the needs of the State. 

“The development of artisanal skills should be only up to some level. I heard you say the Federal Government was developing one skill centre per zone. Lagos State has 29 already and it is not enough. It was true that a few years ago we had to depend on neighbouring countries for skilled labour but that rhetoric is changing because our technical colleges and vocational schools are already producing the artisans in their thousands”, Governor Fashola said.

According to him, energizing the Housing Industry would create jobs for thousands of artisans now being produced by the Skill Acquisition and Vocational Centres and Technical Colleges in the State adding that last year alone, the State Government graduated 6,000 artisans, comprising builders, plumbers, masons and others from those institutions.

The Governor also advised the Federal Government to address the delay at the various sea ports in the country in order to shorten the clearance time of imported goods at the ports pointing out that the delay of building materials at the ports help to increase the cost of such materials as the owners would pass the cost of demurrage to their customers.

“There is a large component of imported materials in our Housing Industry, roofing sheets, windows, tiles, and so on and so forth. The cost of landing them here is exacerbated by the demurrage and the long time it takes to clear them at the ports. That cost is ultimately transferred to the customer. This is where the Federal Government can be very busy and active”, he said.

The Governor further explained, “So the only way those artisans can be kept busy is if we energize the Housing Industry. So they will build more and sell more if the capacity to buy is there. Cost of housing can also be mitigated if we address our delay at the ports”.

Arguing against Federal Government involvement in Housing and Land, Governor Fashola declared, “I have looked through the Constitution and I don’t see where Housing or Land appears either in the Concurrent or Exclusive Legislative List. Land is a Residual Matter because Federal Government does not own land”

“The Federal Government is a government set up to govern for the federating units and the land that it takes is a land that is given to it for the purpose of pursuing the objectives set out in the Exclusive Legislative List”, the Governor said adding that the present anomaly was a carryover of ministries that were created in the Military Era.

He added that while the Federal Government could take land to build an airport, take land to build a border post for Immigration, Customs or a Central Bank and so on because they are the responsibilities that are given to it by the federating states, it has not been given the responsibility for Housing or for land.

Governor Fashola also suggested the use of the Pension Fund in developing housing schemes noting  that there is a huge amount now trapped in the Fund which though has been tied down by legislation, could be invested in the Housing Industry for the benefit of all Nigerians.

“One understands the initiative at the time to lock it down by legislation and limit the areas where investments can be made. It is true that some countries have led housing reforms for their people but they are not Federations, they are just republics. South Africa I know, the United Kingdom I know, Singapore I know, but they are not federations”, the Governor said adding, “We must understand the limitations our federal arrangement imposes upon us and within those limitations try to find ways in which to really achieve our aim”.

The Governor frowned at the many abandoned Federal housing schemes across the country noting that they were initiated during military regimes and governors then were   appointed hence they could never say no to any directives from their bosses.

“Today, disaggregated in Lagos alone, we have identified close  to 100 hectares of abandoned  Federal Government land; lands that were given for various housing schemes. They build a little and they leave the rest; so it has created so many slums in our State. And there are several places if you go there you are either met with soldiers and they say you cannot regulate”, he said.

Advising the Federal Government to leave the states to develop their housing policies, Governor Fashola said the Lagos State Government has already embarked on developing its housing policy to provide houses for Lagosians through its Lagos Home Ownership Mortgage Scheme (Lagos HOMS).

He explained further, “What we are doing now is to develop on our own speed a housing policy called Lagos HOMS. It is for first home buyers alone. We are building blocks of flats across. I think by the first quarter of next year we would have completed about 5.000 units of houses. We are trying to start another 5 – 7, 000 units this year that we will complete late next year”.

“The whole idea here is to use taxpayers’ fund to create a basket to finance the scheme because no bank will lend you money at the rate that we take. We are pegging the maximum interest rate below 10 percent and you would have a minimum of 10 years to repay. We see that it has worked with markets where people pay at their own pace. So it is easy for them to acquire”, the Governor said.

According to him, “When you look, there is no low-cost cement, no low-cost iron rod, no low-cost engineer or low-cost electrical fittings; so the rich and the poor essentially shop in the same market and the only way government can intervene is to subsidize cost of land, cost of infrastructure and interest rate and allow aggregated payment”.

Thanking the Committee for the courtesy of the visit, Governor Fashola commended the Senate for making its proceedings open to the public saying such innovations were  some of the things that Nigerians look forward to in the emergence of a democracy. He added, “Whatever rough edges that still remain can only get better”.

Earlier in his opening remarks, Chairman of the Committee, Senator Bukar Abba Ibrahim, explained that the visit of the Committee to Lagos was part of their oversight functions that would take them to all states of the Federation to assess the implementation of the 2013 Budget as it concerns Housing, expressing regrets that budget implementation at the Federal level has been abysmally low over the years.

The Chairman commended the Governor for the vast infrastructure development that has taken place in Lagos in the last six years and the exemplary good governance being demonstrated by the Governor adding, “From all that we have seen since we arrived, Lagos is working”.

Also present at the occasion from the State Government side were the Secretary to the State Government, Dr. Oluranti Adebule, Attorney General and Commissioner for Justice, Mr. Ade Ipaiye, Commissioner for Works and Infrastructure, Dr. Femi Hamzat and his Information and Strategy and Special Duties counterparts, Mr. Lateef Ibirogba and Dr. Wale Ahmed respectively, Mr. Musiliu Folami and Permanent Secretary Land Bureau, Mr. Akeem Muri-Okunola, while the Senate Committee included Senator represent Lagos East Senatorial District, Senator Olugbenga Ashafa among others.

Culled from

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