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Poor access heightens calls for National Housing Fund privatisation




When the National Housing Fund was introduced in 1992, Nigerian workers thought it was going to put an end to their housing challenges. But 31 years later, the scheme has brought little respite to workers in the country.

According to the Federal Mortgage Bank of Nigeria, 17,886 workers benefited from the scheme in the previous year. Statista, an online data platform, estimated the number of formal workers in Nigeria to be around 60 million in 2022.

Worried by the difficulties workers encounter while trying to access the fund, the Nigeria Labour Congress recently threatened to withdraw civil servants from the mortgage scheme.

The President of the NLC, Joe Ajaero, issued the threat during an investigative hearing organised by an ad hoc committee of the House of Representatives.

The labour union also criticised the Federal Mortgage Bank of Nigeria for its poor management of the funds accumulated from contributors.

The scheme was established by the National Housing Fund Act of 1992, mandating all employers in both the private and public sectors to make remittances of 2.5 per cent of their monthly earnings to the fund.

The NLC president argued that although the government had been consistently deducting the mandated 2.5 per cent from workers’ salaries, the Federal Mortgage Bank of Nigeria had failed to inform the workers about the deposits made into their National Housing Fund accounts.

According to him, the lack of communication has created frustration among workers, who find themselves unable to effectively capitalise on the benefits that the scheme should provide.


“Administrative bottlenecks in the process of accessing the mortgage scheme have created room for corruption in the system. While the Act provides for 90 days from the date of application for the loan to disbursement, the experiences by many workers are horrific as the undue delay in approving the loans forces many workers to abandon pursuit of the loan.

“Many resort to third-party agencies to fast track the loan application at unofficial fees, thus, creating perception of corruption in the process of housing loan approval and disbursement to workers who needed the funds,” Ajero declared.

The labour union president also informed the committee that despite the increase in the total pool in the NHF, workers were still unable to get loans to get shelter. He, thereafter, called for drastic action to save the mortgage scheme.

Meanwhile, the Managing Director of the Bank, Madu Hamman, informed the committee that civil servants were the major contributors to the funds.

According to him, the total amount of contribution from Ministries, Departments, and Agencies from 2011 till date was N238bn, while the total individual contributions from 2011 till date was N225m.

Funding constraint

In an exclusive chat with The PUNCH, the Group Head of Corporate Communications at the FMBN, Timan Elayo, explained that had not been able to fund many of the requests it received due to funding constraints.

She added that a number of requests were denied access to mortgage due to the ineligibility of the applicants.

She said, “Workers are accessing mortgage. That statement is probably coming from the expectation that everybody who wants to get a mortgage can get it. That is not possible because if you go by the number of Nigerians that would want the houses against the amount of money that we have at our disposal to disburse.

“You will know that it is impossible to meet every request. First of all, there is a funding constraint that will limit the ability to meet requests. However, a large number are being met as much as we can and within the available resources.”

The National Secretary-General of the NLC, Chris Onyeka, faulted FMBN’s claim that Nigerian workers were accessing mortgages through the NHF.

Onyeka accused the FMBN of not providing proper accounts of the funds to the intended beneficiaries of the NHF.

Onyeka said, “If people are accessing it, who are they? These funds are kept somewhere and people who access them are the privileged few. That is always the problem. It is our money. It has to be accessible to us. There should be no impediment to our making use of our money.”

Operators demand privatisation

In an exclusive interview with The PUNCH, the Managing Director of Fame Oyster & Co. Nigeria, Femi Oyedele, said the private sector was in the best position to manage the mortgage fund.

He advised, “The private sector should create two levels of mortgage banks, which are wholesale mortgage banks that will be dealing with property developers, and retail mortgage banks for individual property developers. Mortgage is a pool of funds by people who want to build houses through cooperative means and are ready to accept non-commercial rate interest rates on their deposits so that they will be charged non-commercial interest rates whenever they want to access funds for building their houses as a basic need.

“The first thing to do to these people is to have data so that no single person can access a mortgage loan from the retail mortgage banks more than once. This will be for their basic housing needs. Anybody who wants to build a second house will go to the wholesale or secondary mortgage bank, where there are contributors to access higher interest rate loans.

“Mortgages cannot work in a country where the median of the people are not working or earning living wages, one-third of average people’s salaries cannot procure a home for them, houses in the property markets are not affordable to the people and where there is no reliable data  on Housing Needs of the people.”

According to Oyedele, the National Housing Fund has little contributions to housing development in Nigeria.

He added, “Since the government is no longer managing pensions of civil servants, the government should desist from managing housing funds. We need two levels of mortgage banks, which must be private.