FG Moves to Recapitalise FMBN

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• As bank records N472m profit in six years

Chineme Okafor in Abuja

The federal government would recapitalise the financial base of the Federal Mortgage Bank of Nigeria (FMBN) to be able to drive its planned national housing programme, the Minister of Power, Works and Housing, Mr. Babatunde Fashola has disclosed.

Speaking in Abuja, Fashola also said the FMBN has recorded a trading surplus of N472 million for the first time in the last six years after reportedly posting deficits in its annual operational balance sheets.

According to a statement from the senior special adviser to Fashola on communication, Mr. Hakeem Bello on Saturday, the FMBN would act as the government’s anchor in its implementation of the national housing programme.
The bank, it said would drive the housing programme through a mortgage system that is still being worked out.

Fashola, according to the statement, also said that when the scheme takes off, the government would issue mortgages which would be tied to the incomes of prospective beneficiaries in the country, majorly income earners.
Although, he did not disclose the details of the planned recapitalisation of FMBN, he however said the government was already putting in place measures in this regards since the bank was on a recovery trend.

He stated that as soon as the Bank completely returns to clean financial books and could expand the housing fund under its management, the recapitalisation will kick in.
“The new management of the Federal Mortgage Bank, still in an acting capacity, has reversed the loss balance sheet of the company and for the first time in about six years, they are returning surplus from deficit in billions; they have a surplus of about N472 million as at Q3 from N3-4-5 billion negative position,” said Fashola in the statement.

He further stated: “So, once the bank goes back to clean books and expanding the housing fund which it is managing, government can say, as a matter of national policy, ‘look, capitalise, we will inject fund just as we have done with Bank of Industry and we are planning to do with Bank of Agriculture, we can do the same thing.”

On the planned adoption of a mortgage system in the housing programme, he said it would bring relief to ordinary Nigerian workers as it would move the society away from the system whereby landlords demand rent in advance from tenants who receive their salaries in arrears.

“In our own scheme when it starts, we hope we will be in a position to issue mortgages and if you have a mortgage, clearly it can only be tied to your income which is in arrears,” Fashola added.
He however explained that the success of the system would depend largely on how much love Nigerians would want to show to themselves in this regards.

According to him: “So, if I build a house and I know you are going to be paid at the end of December and I tell you to go and bring a rent up to 2017 that you haven’t worked for, do I really love you? So, let us show the kind of nation that we want.”

He further said: “What does a landlord lose if he tells the employer of his prospective tenant to guarantee deduction of the money from the man’s salary at the end of the month? If we can reach that kind of arrangements it will give a lot of people relief because that is the kind of thing that causes inflation, hiked prices.”

On the readiness of the local housing materials manufacturing and building partners to meet the nation’s housing demands, Fashola said government was now at the stage where letters of awards are issued to the partners.

He said once their designs are ready and validated, they would embark on mass production using polystyrene and other locally manufactured components.
“Once we validate the designs then we do mass production. As soon as they can show us that they can do that, we are going to the stage where we would say to them, ‘build, we would buy’. So, if they have government as a ready buyer, it then becomes easier to contemplate a situation where they will finance because there is a guaranteed market,” he added.