Govt. must provide capital to derisk single digit mortgage lending—Osinbajo

Vice President Yemi Osinbajo says it has become imperative for government to provide the capital to derisk single digit mortgage lending by banks.

Osinbajo made this submission on Thursday in Ibadan, Oyo State, while performing the inauguration of the first phase of WestLink Iconic Villa– a Joint Venture between Odu’a Investment Company Limited(OICL) and Chapter 4 Estate Management Limited.

The 67 units unveiled comprise four and five-bedroom detached and semi-detached duplexes and three-bedroom flats.

The vice president said that the OICL started as a government-owned development company in the golden era of the development of the Western Region and birthed several industries, real estate investments among others.

He said it was the new and greatly improved OICL that bought into the vision of the Diaspora investors, Chapter 4 Estates Management Limited, UK, to bring the estate project to fruition.

“So, the story of the WESTLINK ICONIC Housing units, here in ALAKIA, IBADAN, is a story of the triumph of ideas, and vision of private enterprise development capital working seamlessly together.

“There is a lot to do in housing in Nigeria; there is a significant housing deficit 17 million which should ordinarily be a major economic opportunity.

“Not just for house ownership but also for the many jobs and manufacturing opportunities that housing brings,” he said.

According to him, the missing link is not the market, neither is it the number of ideas for private developments; it is housing finance; affordable Mortgages.

“Social housing and affordable mortgages is what we need; every developed economy has had to develop usually with government support, mortgage schemes.

“What needs to be done is that government must provide the capital to derisk single digit mortgage lending by banks,” he said.

Osinbajo said that the U.S., with all its free market protestations, in 1968, established the Federal National Mortgage Association, commonly known as Fannie Mae– a U.S. Government-sponsored enterprise which was also a publicly traded company.

He said that the U.S. government had to intervene to derisk lending.

“There is also Freddie Mac, the Federal Home Loan Mortgage Corporation, commonly a publicly traded, government-sponsored enterprise, was created in 1970 to expand the secondary market for mortgages in the U.S.

“So, the role of government is crucial; we started that process in our housing for jobs programme under the Economic Sustainability Plan.

“The family homes fund was the arrowhead for the first phase; the Central Bank of Nigeria was to provide the intervention fund for mortgage finance through the Family Homes Fund.

“We are still working on the programme but there must also be affordable private sector funding for housing.

“So, we must commend Oodua for providing the support for the project; the future is bright, if we stick to the vision of providing derisking funds supported with development finance funding such as Oodua,” he said.

He said it was crucial that the government and the private sector saw the housing deficit as an important investment and development opportunity.

According to him, mass housing is crucial and Nigeria cannot do without mass housing.

“We started the mass housing programme also under the Family Homes Fund.

“Some of state governments that have done exceptionally well in mass housing—the Borno State Government for example, partnered with us on the mass housing programme through the family homes funds and today, they have done 10, 000 units if mass housing.

“So, it is entirely possible for us to do mass housing on the scale that we need to do it in order to make up for the deficit.

“It is also possible for us to do houses that are affordable for the middle class; for those that are in the civil service, for teachers and for people in private businesses,” he said.

The vice president congratulated the management and staff of Chapter 4 and OICL on the land mark investment.

He expressed optimism that the project would brighten the future of housing in Nigeria.

Earlier in his welcome address, OICL Group Chairman, Bimbo Ashiru, said that the vice president deserved to be celebrated for encouraging Nigerians in the Diaspora to invest at home which resulted in the project.

On his part, Shams Ogunmuyiwa, the Managing Director, Chapter 4 Management Limited, said that the vision was triggered in 2015 when then vice president came to UK and tasked them to invest in Nigeria.

“Sir, you may not remember everybody who met with you, but those of us who met with you will never forget that situation.

“When you came to London to campaign in the UK, that was you challenged us to bring opportunities from our Diaspora experience to our father land.

“You promised that your government will make ease of doing business a priority; we thereafter had one on one chat; that meeting inspired what set us up on this trajectory,” he said.

There were also goodwill messages from representatives of the governors of southwest states.

Osinbajo, who was also presented with special gifts, afterwards, embarked on an inspection of tour of the facility.