The federal governmentâ€™s desire is to involve foreign companies in housing development in the country, but they must drop their insistence on being granted Sovereign Guarantee, according to the Minister of State for Power, Works and Housing, II, Mr. Suleiman Zarma Hassan.Â Bennett OghifoÂ reports
Minister of State for Power, Works and Housing, II, Mr. Suleiman Zarma Hassan, a Surveyor, wants foreign investors in housing to rethink their insistence on having Sovereign Guarantee from the government to get involved in financing of housing development.
This was a strong point delivered by Hassan at the first Session of the 8thÂ Global Housing Finance Conference, held at the World Bank Headquarters, Washington D. C. U.S.A, recently.
There were over 50 Nigerians at the programme, whose attendance was facilitated by Niche PR, aÂ Nigerian-based Public Relations company. The Nigerian delegation included the Managing Director Federal Mortgage Bank of Nigeria, the team from Federal Ministry of Power, Works and Housing, Federal Staff Housing Loans Board, Office of the Head of Civil Service of NigeriaÂ among other relevant governmental and non-governmental agencies and the Private Sector.
Sovereign GuaranteeÂ is a promise by theÂ GovernmentÂ to discharge the liability of a third person in case of his default.Sovereign GuaranteesÂ are contingent liabilities of the Central and State Governments that come into play on the occurrence of an event covered by theÂ guarantee.
According to the minister, â€œOne of the challenges we have been encountering with investors in the housing sector, especially those from abroad is their insistence on being granted Sovereign Guarantee for investment. It is important to disclose that it is not an easy task obtaining Sovereign Guarantee. This always stalls project negotiations as Government fears it could worsen the nationâ€™s debt profile with its attendant economic and political implications. If the housing finance challenge is to be addressed, investors must look beyond Sovereign Guarantees from Developing nations and concentrate on the larger picture using variables such as general investment climate, political stability, ready market, industrial trends, etc., to gauge the security of their investment.â€
He said theÂ theme of the 8thÂ Global Housing Finance Conference, â€œBreaking the Mold-New Ideas for Financing Affordable Housingâ€ was quite apt, considering that existing approaches seem to have not sufficiently addressed the housing finance challenge in most developing countries, especially in Africa.
The minister discussed Global Trends, Opportunities and Innovations in Affordable Housing Finance, as well as outlined the nationâ€™s housing financing challenges and steps being taken to address them.
He said the need to explore innovative ideas on housing finance to ensure access to adequate, safe and affordable housing cannot be over emphasised, and that the federal government was mindful of this reality and has accordingly initiated several sectoral approaches to bridge the housing deficit.
He said, â€œOn this account, the government is attracting finance from local and foreign investors through the Public Private Partnerships (PPP) arrangements, Budgetary Appropriations, granting of Estate Development Loans, Bankable Off-Takers Guarantee and Cooperative Housing Finance initiative amongst others by mandating its various Agencies such as the Federal Ministry of Power, Works & Housing (FMPW&H), Federal Mortgage Bank of Nigeria (FMBN) and Federal Housing Authority (FHA).â€