Nigeria Housing Deficit: Does The World Bank Hold the Key?

Published on 26th November 2013

President Goodluck Jonathan says that Nigeria needs N56 trillion to bridge the country’s 17 million housing units deficit. Recently, the Federal Government gave approval for the disbursement of the $300 million World Bank loan for the implementation of the Nigerian Mortgage.

Nigeria’s  leadership keep making announcements on housing shortages but perennially fall short on what needs to happen in order to have a viable and formidable mortgage institution. The World Bank’s petty drop of $300m, which when mentioned in Naira exchange value, blows the minds of an average and naïve Nigerian on how big it is, means nothing.

The World Bank is not known and or regarded in US as a mortgage expert. Never in my 25 years experience living and working in real estate industry in US, at a point headed US Federal Deposit Insurance Corporation, central regional office in Dallas, as Regional Appraisal manager, was World Bank ever invited to testify before the US Congress on what needs to happen to US mortgage restructuring. The World Bank is a gatekeeper on more than 100 naïve and uniformed countries they are supposed to keep a lid on. The best action against The World Bank prescriptions  is to avoid them and seek to develop internal systems fashioned by seasoned practitioners that have unconditional love for their native land.

But for Nigeria, every time there is need for better economic plan with better than average outcome, the wish is to consult with the World Bank. I guess with Madam Okonjo-Iweala, Nigeria’s finance minister and elevated coordinating minister for economic development, keeping her former employer busy in affairs of Nigeria economic development, she has achieved what the ulterior motive is. Such that President Jonathan once considered setting up a presidential office for the World Bank in Aso Rock; what a dog on a leash mentality!

The World Bank does not have the key or a road map to Nigeria’s  mortgage securities challenges. That Nigeria leadership has not sought alternative means to develop its financial and capital markets devoid of the World Bank intrusion and voo-doo like solutions, makes me want to throw up. The World Bank is like visiting a psychiatric doctor, they never give one enough solutions that makes the patient well. It is always, let’s try this and come back again and again, to see how one is doing. Of course, the prescription is endless and the patient hooked for life with no end in sight. The best solution is to  ditch the doctor and seek organic solutions anchored on strong will to overcome and prevail.

If Nigeria’s leadership is serious, they need to constitute a seasoned team of persons with extended background to deliver what needs to happen. Until property laws, foreclosure, deed of trust instruments, interest rate and amortizing debts are made part of developing a robust housing mortgage sector in Nigeria, all the world money handed to Nigeria will not make a difference. 

Nigeria’s alleged need of about 17m housing units cannot be financed out or with budget allocation. There is need for robust stand-alone system that is internal and secured on a legal and financial framework devoid of political interference. But that is a tall order in Nigeria. 

Lenders think default and need assurance that the collateral that secures their debt is credible having a value indicator that is close to reasonable. With estate surveyors/valuers in Nigeria manufacturing values to suit lenders and owner expectations, how can anyone place weight on such a loose and lousy practice? The valuation of property for mortgages must be standardized and improved before a mortgage industry can stand and survive. More than 95% of the property values in Nigeria are fake and fluke, such that in a portfolio for mortgage securities, an investor will be duped before the ink on the signature dries. 

Nigeria needs the ABC of Mortgage Securities before they skip to XYZ. But again in a Hail Thee Country where Hell rages, no one is sensible enough to pull back and ask hard questions. The choir and chorus liners always dwarf good sense – it is a TRANSACTION economy, not a TRANSFORMATION one. There you have it, the world’s most populous black nation is mired in situations that it finds hard to extricate itself; crabs in buckets, if one were to observe.

By Ejike Okpa II
Dallas, Texas.


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