How to attract sustainable finance for affordable housing delivery —Experts 

Experts in the industry have suggested necessary steps texpected of real estate developers/government to attract sustainable finance through the Multilateral Development Finance Institutions (MDFIs) for affordable housing delivery in the country. DAYO AYEYEMI reports.

IT is no longer news that Nigeria has a housing deficit of over 17 million units and to bridge the gap, there is need to build one million units yearly for the next 20 years.

Presently, the total housing construction by both public and private sectors is less than 100,000 units per year, a far cry from the one million units’ target.

Despite high demand for housing by Nigerians, especially those in the low-income group, there has not been corresponding supply due to the dearth of sustainable finance.

Due to this shortfall, stakeholders in the industry under the auspices of the Association of Housing Corporation of Nigeria (AHCN) gathered at a workshop with the theme ‘Stimulating Continuous Flow of Housing Finance For Economic Recovery’ in Abuja, on how to attract sustainable housing finance for effective housing delivery in the country.

Setting the tone on the need to attract multilateral finance for affordable housing in Nigeria, Chief Executive Officer, Financing & Partnerships Africa Ltd, Emmanuel Akinwumi, said this could be achieved in Nigeria if the challenges confronting the housing development sector are tamed.

According to him, there was a need to define Nigeria’s social housing policy to affordable decent housing for all Nigerians. This, he said might expand focus to affordable home rental, affordable rent-to-own and rehabilitation, improvement and expansion of existing housing stock (including urban renewal, reconstruction of slums and development or satellite towns).

He added that developers or government must be seen building communities instead of models of silo proposals in order to attract multilateral finance.

Akinwumi urged real estate developers to deepen dialogue with Multilateral Finance Institutions (FDIs) for housing delivery, saying they should strengthen collaboration in Public Private Participations (PPPs) to foster effective housing finance and delivery.

He pointed out that multilateral DFIs usually have a greater financing capacity than bilateral development banks, while also acting as a forum for close co-operation among governments.

To attract multilateral finance, he told stakeholders “Build sustainable communities; checkmate growing insecurity in the country and achieve improvement in the housing ecosystem; improve macro-economic, policy, regulatory and judicial environment by putting round pegs in round holes in national and sub-national governance.

“Tame forex crisis and lack of transparency by evolving holistic reforms in place of ad hoc interventions and investing in complementary infrastructures.”

Akinwunmi tasked government on commercialisation of the Federal Mortgage Bank of Nigeria (FMBN) to build its capacity to mimic world class institutions like the CMHC Canada, which, according to him, successfully took charge of housing development and finance anchor, research, data bank, advocacy, compliance, mortgage guarantee, securitisation, training and capacity building, improvement of communities, “green” advocacy, energy efficiency and leading in other housing development and finance issues, driving positive growth in the Canadian economy.

He urged the stakeholders to continue the housing development and finance advocacy.

The main multilateral DFIs are African Development Bank (AfDB); Asian Development Bank (ADB); European Bank for Reconstruction and Development (EBRD); European Investment Bank (EIB); Inter-American Development Bank (IDB); International Finance Corporation (IFC); Islamic Development Bank (ISDB) and the World Bank (WB).

Shedding more light on the role of multilateral finance in housing, Akinwunmi said: “Be it housing or other infrastructures, Multilateral DFIs or MDBs play a core role in development cooperation and partnership effectiveness with client countries.

“MDBs bring international finance and expertise together in support of participating countries. Provision of development finance at relatively lower interest rates and longer tenor and grace period,” he said

He added that multilateral DFIs also ensured political risk mitigation by supporting improved enabling environment; and advocates of social inclusion, gender sensitivity and positive environmental, other positive development impacts.

Real Estate Investment Trusts (REITs)

Founder/CEO, Eximia, Hakeem Ogunniran, also spoke on how to unlock the hidden potential of the Real Estate Investment Trusts (REITs) as a catalyst for continuous flow of housing.

He defined REITs as regulated investment vehicle created to own and manage income generating assets over the medium to the long term basis.

Earlier, President of AHCN, Dr Victor Onukwugha, said there have been diverse questions begging for answers in the housing sector ranging from inadequate housing finance to service both the demand and supply end of the market, the controversial figure of housing deficit, crawling mortgage market, affordability question, land administration quagmire and incessant building collapse among others to instability of housing policy implementation.

“In the midst of grappling with all these unanswered questions, there was an eruption of COVID-19 a global pandemic which paralysed and displaced all business and policy strategies and further compounded housing problems.

He raised posers as regard the rising inflation and unemployment rates arising from global economic crisis emanating from post COVID-19, asking if there would be any hope for attracting sustainable funding for social and affordable housing.