Ashafa at FHA: A New Dawn for Social Housing?

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Gbenga Ashafa

By Bolaji Akanni

To President Muhammadu Buhari’s implacable critics, the recent appointment of Senator Olugbenga Bareehu Ashafa as the new helmsman at the Federal Housing Authority (FHA), must have come as a big surprise. After all, his administration has garnered considerable notoriety for a string of controversial appointments into public offices, which, now and again, appeared to have made a mockery of the Federal Character principle. This time the President clearly disappointed his detractors with the rare replacement of a northerner by a southerner on a key public position, thus departing from what many have considered a divisive and unwholesome trend.

However, what is really cheering in the appointment of Senator Ashafa to succeed the former Managing Director of FHA Professor Mohammed Al-Amin really should have nothing to do with ethnicity or party politics. For, by tapping the former two-term elected representative of the Lagos East Senatorial District for the FHA top job, President Buhari has undoubtedly chosen a tested and accomplished top-drawer public administrator to drive the much needed refocusing of a critical but underperforming agency of the federal government. In achieving his deliverables on his current assignment, Senator Ashafa should, in my opinion, shift the gaze of the FHA firmly in the direction of government-provided public or social housing to further cement his legacy as a formidable achiever.

The FHA was established as a wholly owned agency of the Federal Government of Nigeria vide Decree 40 of 1973 with a mandate to, among others, prepare and submit “ to government, from time to time, porposalls for National Housing Programmes” and to execute “ such housing programmes as may be approved by Government.” Long before the FHA came into existence, there was the Federal Mortgage Bank of Nigeria (FMBN), established as the Nigerian Building Society (NBS) in 1956 and given its present name following the Indigenization Act of 1973. It was the first institutional initiative to provide long term credit facilities for mortgage institutions in the country and to mobilize both domestic and offshore funding into the housing sector. The FMBN also administers the National Housing Fund (NHF) established by the NHF Act of 1992 – recently replaced by the National Housing Fund (Establishment) Act of 2018 – to essentially mobilize funds that will facilitate the provision of affordable housing for Nigerians.

There have been other institutional and legislative interventions to strengthen the housing sector but the emphasis has rarely been on the provision affordable housing for the poor and vulnerable as a deliberate part of the government’s social policy. Take the FHA for example. It was created just six years before journalism icon and politician, Alhaji Lateef Jakande commenced a blistering mass housing programme that saw the construction of hundreds of thousands of affordable housing units for low and middle income earners during his four-year tenure as Executive Governor of Lagos State from 1979 to 1983. Since then, and in spite of numerous institutional and legislative initiatives and promises, governments and the real estate sector, including the FHA, have yet to deliver any truly successful large scale mass housing projects in the country, with housing provisions consistently falling far short of policy projections.

Mass or social housing entails large scale provision of housing units, most often wholly by government, or sometimes in partnership with the private sector, for the public to acquire either on owner-occupier or rental basis. In our situation, the implementation of mass housing should occur when governments acquire lands in areas on the outskirts of heavily populated urban areas to build home units numbering tens of thousands and in multiple places at any point in time. Its main purpose is to enable households and families which are unable to shoulder the heavy financial requirements needed to buy land and build houses at prevailing market rates, to acquire decent homes at reasonably reduced costs. That objective was apparently achieved in the short term by the Jakande administration’s mass housing programme . Unfortunately, its long term implementation and impact was truncated by the December 1983 military putsch.

Since then, Nigeria’s urbanization rate has exploded, growing at an average of 4,3 percent annually, according to the World Bank and driven by uncontrolled migration to the cities. On the contrary, the real estate sector, has practically stagnated in terms of its contribution to the Gross Domestic Product (GDP), employment generation, and, more importantly, provision of affordablel mass housing initiatives for the ever-ballooning urban populace. Now, the country is saddled with an unenviable housing deficit, which, at the last count in 2012, stood at 70 million home units. To bridge the gap, the National Bureau of Statistics (NBS) said the nation requires the construction of 700,000 houses annually. That target is more than seven times the less than 100,000 units being constructed. Indeed, what we have witnessed in the past two decades is the construction of between 300 to 500 home units in residential estates located in high brow areas of our cities. These are homes that only high-income or upper middle-income earners can afford while scant attention is paid to the provision of decent and affordable housing for low-income earners and other vulnerable members of the society.

Without any doubt, the FHA and the real estate sector and even prospective homeowners are beset with several challenges and difficulties which have continued to stymie otherwise robust initiatives to successfully deliver affordable housing. These, as identified by numerous commentators, include finance, politicization of government legislation and requests, bureaucratic regulations, the nation’s massive physical infrastructure deficit, unreliable data and statistics, lack of transparency as well as shortage of skilled labour and high quality building materials. As recently as November 2019, the Works Housing Minister, Mr Babatunde Raji Fashola, SAN had made a strident call for better collaboration between the Federal and State governments to realize the objective of providing affordable housing for the nation’s teeming urban population. In an address to the National Council on Lands, Housing and Urban Development, Fashola noted that land is the basic requirement for building and owning a house and that land ownership and control lie with the states. He added that the Supreme Court has also determined that urban development and planning is within the jurisdiction of the states. It is evident from the minister’s remarks that the deplorable and unpatriotic practice of denying federal government’s requests for land for public housing in states not controlled by the ruling party, still persists.

As analysts have posited severally, the revised National Housing Fund Act passed by the National Assembly on February 18th 2019 will, contrary to expectations, make access to housing funds even more inaccessible to low income earners because it taxes the poor more than the rich, especially when the respective Pay As You Earn(PAYE) income tax requirements are weighed against stipulated NHF deductions. Besides, the new Act imposed a 2.5 percent levy on cement which is tantamount to a tax on property development – thus making housing even far less affordable for the poor and vulnerable.

In spite of these and other formidable challenges, the FHA and the Federal Ministry of Works and Housing, the authority’s supervising ministry, have enunciated admirable plans and even executed some projects that may pass for ‘large” housing projects in parts of the country , especially the Federal Capital Territory. But these have barely scratched the surface of the national housing deficit. And, in almost all cases, the homes constructed are anything but “affordable” to those who needed affordable shelter the most : low income earners.

Former FHA Managing Director/CEO, Professor Mohammed Al-Amin said in September 2018, that the organization planned to invest a hefty N9 billion in the construction of its Abuja Mass Housing Project of 550 units of houses. Al-Amin, who was inspecting the half-completed project located at Zuba at the time, promised that none of the “affordable houses” will be sold “above N5 million.” He was optimistic that communities around the Zuba area, especially spare parts dealers and other Nigerians who cannot afford rents in the heart of the FCT, would be the “off-takers to access the housing units.” It is doubtful that a 550-unit housing scheme qualifies to be tagged as “mass.” The price tag too, is prohibitive for the target public.

A somewhat different tone was sounded by Al-Amin’s successor at the FHA in acting capacity. The then Acting CEO of the authority, Mallam Umar Gonto was upbeat when he informed the House of Representatives Committee on Housing and Habitat in October last year that the FHA was on the verge of constructing 30,000 houses in Abuja Diaspora City on 750 hectares of land in Kabuzu-Maitama District of the FCT. He disclosed that the FHA planned to replicate the “30000 pilot mass housing scheme” in all the six geopolitical zones of the country. Since that project is most likely still on the drawing board till now, it would be a decent and veritable take-off point for the FHA under Senator Ashafa to reawaken the interest of federal and state governments as well as other stakeholders in the housing delivery chain, to the urgent need for social housing to provide decent and affordable homes for Nigerians, especially in the urban areas where the housing deficit is more pronounced.

Other interventions and initiatives which Senator Ashafa should work assiduously to bring to fruition to deliver mass housing are the Family Homes Fund, a partnership between the Federal Ministry of Finance and the Nigerian Sovereign Investment Authority and the proposed creation by the Central Bank of Nigeria of the Nigerian Mortgage Guarantee Company (NMGC) as well as Mortgage Interest Draw Back Fund. The Family Homes Fund has a commitment on paper to facilitate and deliver 500,000 homes by 2023 while the CBN-backed organizations will strengthen the institutional framework for mass housing financing and delivery.

Ashafa has arrived at the FHA with a coveted track record of passion, diligence and total commitment to the public good. He had, literally, cut his public service teeth in the former Unified Local Government Service in Lagos State, when the pace, efficiency and tradition of excellence set by the then Lagos City Council (LCC) was the benchmark for municipal administration in the south of the country. Then, unlike now, things worked in the third tier of government.. Diligently, Ashafa had learnt the intricacies of efficient and impactful local government administration and delivery of services to the grassroots at the foot of the masters such as Chief Rasheed Olu-Ajayi and Alhaji Babatunde Rotinwa. The latter rose to become a Head of Service of Lagos State and is currently Chairman of the state’s Local Government Service Commission.

By the time he left the local government service after a decade in 1990, Ashafa had held several key positions in the councils including area officer in charge of departmental Tenders’ Board and the Finance and General Purposes Committee. More importantly, he had mastered what it takes to serve the public passionately and efficiently. This sturdy foundation had served him and Lagos State well after he returned to public service through politics following a stint in the private sector as an entrepreneur.

Senator Ashafa’s sterling performance during his extended service as a political appointee in Lagos State during the pacesetting tenures of Governors Asiwaju Bola Ahmed Tinubu and Mr Babbatunde Raji Fashola, SAN, in land matters, urban planning and housing, has been widely recognized and celebrated. He has also drawn commendations for the purposeful and robust performance of his oversight responsibilities as two-term Senator of the Federal Republic of Nigeria. Of note is the vigour, tact and astute leadership he demonstrated as Chairman of the Conference Committee of the Senate on the critical Nigerian Railway Authority Bill, a piece of legislation which may ultimately set the country’s infinitely problematic rail system on a sure-footed trajectory of relevance and impact.

The public will be banking on his exceptional competence and devotion to public good, to deliver a “government-provided” social housing for the nation’s teeming urban population.

*Bolaji Akanni is a Lagos-based public commentator