The Nigeria Mortgage Refinance Company is to raise N50 billion from the capital market through federal government guaranteed bonds
| By Anayo Ezugwu | Dec. 22, 2014 @ 01:00 GMT |
THE federal government has approved plans by the Nigeria Mortgage Refinance Company, NMRC, to raise N50 billion from the capital market through periodic issuance of federal government guaranteed bonds to institutional investors. Ngozi Okonjo-Iweala, minister of finance and coordinating minister of the economy, said the government has concluded arrangements to promote national building standards in the country in collaboration with private developers.
Okonjo-Iweala, who gave the keynote address at a Housing Stakeholders Consultative Workshop held in Abuja, said the NMRC was launched on January 16, by President Goodluck Jonathan as a public private partnership, PPP, initiative with private sector mortgage lenders to encourage and promote home ownership by Nigerians. The process would unlock the socio-economic potentials of the housing sector in Nigeria.
The refinancing mechanism is essential to provide mortgage lenders with access to increased liquidity and long term finance that would enable them provide 20-year mortgages at affordable rates to borrowers.
According to Okonjo-Iweala, the establishment of NMRC was supported by a World Bank/IDA credit of $250 million at zero interest, 40-year period and 10 years grace, and 0.7 percent commitment charge, to be disbursed in six tranches as Tier 2 capital. “NMRC has also so far raised N7.05 billion shareholders capital but will raise additional funds in the capital market through the periodic issuance of federal government guaranteed bonds to the tune of N50 billion to institutional investors, with the overall target of $5 billion in bond issuances in the medium term,” she said.
On building standardisation and the process of certification of building, Okonjo-Iweala said that although a detailed National Building Code has been developed for the country, a matching set of building standards has not yet evolved. “Through the new Nigeria Land, Housing and Urban Development Roadmap, the Federal Government will promote national building standards in collaboration with private developers to enhance the implementation of the NMRC visions. She is of the view that efficient and effective building certification process are needed to promoting sustainable houses and housing delivery as well as effective mortgage administration. So too is a building inspection process as a prelude to certification. “It is important that we generate a building inspection through to certification process that is more amenable to rapid delivery of quality homes. Minimum standards for residential or commercial builds must be set below which no developer or builder worth his money will not go. This must be backed by some form of legislative teeth to the point where buildings must be duly certified before they are deemed mortgaged. It is an imperative requirement to avoid the occurrence of building failures and subsequent collapse,” she said.