By Okachikwu Dibia
It was in a national daily that I saw an advertisement titled: “OWN A HOUSE WITH YOUR RENT” published by the Federal Government of Nigeria (FGN) through the Ministry of the Federal Capital Territory (FCT) in collaboration with the Nigerian Labour Congress (NLC) and the Trade Union Congress (TUC). On inquiry I was told that the FGN will be building, in the next one year, five bedroom duplex, four bedroom duplex detached, four bedroom duplex semi-detached, three and two bedroom flats to be acquired by public and private sectors workers resident especially in Abuja for N46m, N38m, N34m, N12.42m and N10.44m respectively. Interested workers would make a down payment of 30% for the N46m, N38m and N34m category and 10% for the N12.42m and N10.44m category. It is also required that the worker must be contributing to the Pension Fund ( recall that the Bureau of Public Enterprises had reformed the pension sector through the Pension Reform Act of 2004 and the sector since then has accumulated over N3 trillion as at December 2013).
As a public servant living in Abuja, I know that the following corresponding staff categories to these houses are the Minister, Permanent Secretary or Director General for the N46m; Directors, Deputy and Assistant Directors for N38m and N34; Senior staff for N12.42m and Junior staff for N10.44m.
While I agree that it is a good policy intervention on the part of the FGN especially now that election is around the corner, I seriously contemplate its success at reaching the target. The first and most crucial issue is how a normal public servant can make the required down payment given his/her meager salary. Using myself as an example, as a Deputy Director with about ten years to retirement, it is near impossible for me to raise either N11.4m for the down payment of a house costing N38m or N10.2m for the N34m house because my entire annual salary which includes rent is less than either of these down payments. Truth is that I need the house because I do not have any and I am qualified to have one. But the crucial problem is: payment of 30% or 10% down payment to acquire a house in Abuja based on the “OWN A HOUSE WITH YOUR RENT” intervention. So from where do I raise the almighty down payment? Except staffers who earn other forms of money outside their salaries (and this is one reason public servants take seriously the issue of travelling and travelling allowances, it is a do-or-die matter in public institutions in Nigeria), I bet the government that no public servant who decently and sincerely rely on his/her salary can afford the down payment and that is the end of the matter for him/her. Policy finish!
Another issue with this type of intervention is that most times government do them in a hurry. As far as I am concerned, most housing policies over the years failed because policy makers have not been patient enough to find out why the past housing policies failed and guide against that in the coming one.
Also, what about the prices for the houses: are they not too high given the salary package of the Nigerian public servant? The house prices should be in tandem with the salaries that would fetch them, otherwise it may not succeed. The argument that social houses do not befit Abuja, Nigeria’s capital city does not gel because in advanced countries social houses are of better quality compared to the houses lived today in Abuja and Lagos by Nigeria’s rich class. But the private developer will not agree because he wants to make surplus and exorbitant profit. Government should have checked this if it holds strongly the idea of high quality social houses for Nigerian workers.
As a corollary, let me also say that the prices are so high so that the average public servant would be frustrated from having access to the houses, and as such, the National Assembly members who have thousands of millions would simply buy them up as they have done and are still doing in several such interventions by the Federal Housing Authority within Abuja metropolis. That socially intended houses are bought over by the so called rich in Abuja negates one of the essential reasons for government as enshrined in section 14(2)(b) of the 1999 Constitution of the Federal Republic of Nigeria.
How could the instant intervention take care of the repayment period? It gives 15-20 years period to repay the balance after down payment. So it may be drastically difficult for public servants who have less than 15 years to retirement to access the facility. This is surely discriminatory and would force people to belong by all means im/possible. If it must be based on rent, my annual rent, for example, cannot repay the balance of the cost of the house in 10 years.
For this nice-on-paper intervention to succeed, the FGN should quickly suspend this show and seek for a detailed study, in three months time that could determine why the previous housing interventions failed in Abuja in the last 10 years. The study should also capture staff who are yet to have a house of their own through any government housing policy or intervention.
Government should refocus the idea around social responsibility instead of business. This is true because government has a lot of business in social responsibility and no business in business. It needs to target building of quality houses financed by government that should recover at most 50% of its cost. Sources of finance: government should close at least 10% of all avenues through which billions of Naira are stolen daily ( unaccountable crude oil sales, crude oil theft, fuel subsidy theft, contract inflation, National Assembly’s too high and unrealistic remuneration, defense budget that hardly defend Nigerians etc).
Government should also divorce this intervention from the 2015 elections so that its focus and implementation would not be encumbered with political pressures.
It has been a common knowledge that the contributory pension fund has accumulated over N3 trillion in the accounts of the primary mortgage institutions. A good portion of this amount should be used to support the critical yet difficult down payment requirement. This down payment requirement is the crux of the matter.
What is government doing with the monthly contribution by public servants to the National Housing Fund (NHF)? Over 1,107,000 public servants (see Malam El-Rufai, 1st October 2011 at www.nigerianvillagesquare.com) work in Federal Civil Service contributing a monthly average of at least N500 to the NHF. This gives about N7 billion annual contributions. What has the NHF done with this money? Nigeria’s housing deficit is still estimated at about 17 million houses to cost N56.9 trillion according to the World Bank. So to what extent, on yearly basis has NHF been able to reduce this colossal deficit? I have been contributing since I joined the public service in 2007, yet I do not have any house of my own; because I cannot pay any 10% or 20% or 30% down payment to any of the private developers trouping to my office to market their houses. This NHF contribution should be available for the almighty down payment and indeed the balance and thereby gradually reduce the housing deficit. Not doing anything about it and merely waiting for foreign investors to provide the funds to eliminate the deficit is a wild dream.
Okachikwu Dibia contributed this piece from Abuja, firstname.lastname@example.org