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World Bank earmarks $300million for mortgage infrastructure in Nigeria

By on April 23, 2013

The World Bank is to partner Nigeria to develop a sound mortgage financing structure that would deliver affordable houses to Nigerians.

The multilateral institution is to provide financial access and liquidity to the tune of $300 million to kick start the project.

Banks in the country are to partner government to develop a mortgage vehicle that will manage housing development in Nigeria. Government will, however, have a small share. This fact was disclosed by the Minister of Finance and Coordinating Minster of the Economy Dr. Ngozi Okonjo Iweala.

Making the disclosure at a briefing yesterday with the CBN Governor Sanusi Lamido Sanusi, the Minister said the facility from the World Bank would attract a zero per cent interest, 0.7 per cent commitment charge, 10 years of grace and 40 years repayment period.

She said Nigeria currently has a huge housing deficit of 17 million which is growing by two million per year.

The minister said the Federal Government has asked for States that will volunteer to remove the constraint on land acquisition, certificate of accupancy and others to serve as the pilot project.

According to her, six states, Lagos, FCT, Bauchi and Anambra states have volunteered to pioneer the initiative.

She disclosed that the guidelines for setting up the structure of mortgage financing in the country is being worked out and by the end of the year, the institution will be in place and will begin operation early 2014.

The minister said the Federal Government will float a Eurobond this year, adding that it will put  time table of the Eurobond together and do a road show in June in the relevant market in London, New York etc.

The Ministry of Finance will undertake road shows in Europe and America to attract investors to subscribe to the bond.

Okonjo-Iweala said:  “This will be our second Eurobond on offer. The yields on Nigeria bonds are good. This is an auspicious time for us to go and launch the Eurobond and so we are continuing.

This bond will go specifically to support the energy sector, it will support gas to power investment, gas to power pipe line, to support the bulk trader for us to complete the reforms in the power sector”.

On the sovereign wealth fund, she said it has been launched, operational and that key executive officers have been appointed.

The 2013 Spring meeting of the IMF/World Bank ended with the conclusion to end extreme poverty by 2030.

World Bank President in his closing remarks said “This will be hard work. The target of 2030 is closer than you think – just 17 years away. We will bring the urgency of the task to the world every year by reporting on our progress, country by country, on the rate of extreme poverty around the world as well as the changes in the income of the bottom 40 percent in each country, the people who are vulnerable to slipping back into poverty in the event of losing a job or suffering a health crisis. We will learn every year where we are making progress and where we are not.

“I also very much welcome the development committee’s call for a robust replenishment of our fund for the poorest – IDA – with strong participation from all members.

These Spring Meetings – my first as World Bank Group President – had several other major highlights.

One was the uplifting presence and participation of UN Secretary-General Ban Ki-moon, who joined me for several high-level meetings and events and who most importantly underscored the great importance of the UN system and the World Bank Group working hand in hand to end poverty.

We can be much more effective and efficient if we combine forces to address political, security and economic development issues at the same time. This is our promise to the world”.

“A second key issue at these meetings was the attention paid to climate change. As I talked about in several meetings, we need a plan that is equal to the challenge of a disastrously warming planet.

A third important part of these meetings was the focus on the need for countries to invest more in health and education. Without providing universal access to education, without improving education systems so that all children not only attend school but learn in school, and without building health care systems that truly provide quality care to all people, countries will miss the opportunity to make the critical investments in human capital that will determine their competitive position in the global economy. Investment in people, especially in health and education, is the right thing to do, both from a moral and a strategic perspective”.