MOFI, Shelter Afrique Sign MoU on  Structured Financing for N1tn Real Estate Investment Fund

Ndubuisi Francis in Abuja

The Ministry of Finance Incorporated (MOFI) yesterday signed a Memorandum of Understanding (MoU) with Shelter Afrique Development Bank

(ShafDB) to kick-start an international commitment to strengthening Nigeria’s housing sector through the N1 trillion multi-tranche MOFI Real Estate Investment Fund (MREIF)

The MoU signing event was the icing on the cake for the MREIF programme which has already disbursed 100 mortgages since the cqpital raising of an initial N250 billion in the first and second tranches.

ShafDB is the Pan-African Multilateral Development Bank(MDB) dedicated to promoting and financing housing, urban development and related infrastructure.

Speaking at the MoU signing ceremony in Abuja , the Managing Director of MOFI, Dr. Armstrong Takang said solutions to African problems lie in Africans and African institutions.

According to him, housing is one of those areas of challenges that provide incredible opportunities for African businesses.

He expressed gratitude to President Bola Ahmed Tinubu who has entrusted MOFI with the responsibility to make MREIF  a reality, adding that he had demonstrated commitment not only in terms of raising resources but also political support.

He noted that MREIF is a N1 trillion programme, which will be raised in series, adding N150 billion had been raised in Series 1 and N100 billion in Series, totaling N250 billion.

According to him, the disbursement to mortgages has already commenced, explaining that practical expression is being given to what MREIF set out to achieve.

Takang noted that plans are underway to go back to the market to raise more funds as N1 trillion is like a drop in the ocean when the scale of housing deficit in the country is put in consideration.

 He, however, noted that it was a very good and symbolic start, saying that there is a lot of financing for housing which are not in local currency like the MREIF  which is in naira.

Takang said with MREIF denominated in naira, the challenge of risk is eliminated.

He stated that MREIF not only provides long-term , affordable mortgages with interest rates as low as 12 per cent bit also support developers through off-take guarantees that unlock financing for large scale-scale projects.

He explained that MOFI dies not give mortgage financing but provides offtake guarantees.

The MOFI chief executive noted that with a clear structure that connects capital markets, developers, and home buyers, MREIF ‘s mission was to tackle both supply and demand constraints.

The partnership with Shelter Afrique, he stressed, will further enable the fund  to scale, diversify capital sources, and catalyse the housing ecosystem.

Speaking at the event, the Managing Director of Shelter Afrique, Thomas-Habib Hann expressed strong confidence in Nigeria’s housing market and the  MREIF framework, describing it as “an attractive vehicle with real impact and investment returns.”

According to him, Nigeria is one of the two largest shareholders of Sheter Afrique, assuring that the company was committed to financing innovative financing models like that of MREIF.

In his remarks, the MREIF Coordinator, Mr. Sani Yakubu applauded Tinubu for providing all the necessary support for MREIF, adding that it encapsulates the housing component of the president’s Renewed Hope Agenda.

He added that all the necessary approvals for the MREIF had been secured, ranging from that of the President, the Federal Executive Council (FEC) and the Securities and Exchange Commission (SEC)..

In terms of rating, he stated that it had been rated Triple A (AAA) by Augusto and AAA by GCR.

Also, the Managing Director of ARM, the investment managers of MREIF, Mrs. Kia Orga disclosed that 100 mortgages had been disbursed si far, adding that the offtake has continued to gain a lot of mileage.