Speeches

Presentation Of Letters To Beneficiaries Of The First Tranche Of The 40 Billion Naira Lagos State Mortgage Scheme

Apr 3, 2008 - 1. We will recall that on the 24th day of October, 2007, I presented a blue print on this Administration’s cardinal objectives and policy trust on accommodation by launching a =N=40 billion Lagos State Mortgage Scheme as a revolutionary paradigm shift in the provision of affordable housing for the vast majority of our people. As I said on that occasion, the provision of mass housing is a key component of the success and prosperity of any developed economy as every citizen deserves decent and affordable housing. Indeed, the degree of home ownership in any jurisdiction is a key component in determining its Human Development Index and the level of its success in alleviating poverty.

2. The benefits of providing affordable and qualitative housing for the people of any country are immense and invaluable. For one, the larger the number of people that live in comfortable and standard accommodation, the fewer the number of people who will live in slums, shanties and sub-standard structures that erode human dignity. Again, the more people are empowered to own affordable and decent homes, the more they can take charge of their destiny and grow in self confidence and self esteem. Furthermore, there is evidently a correlation between the rate of human beings’ productivity as well as their physical and psychological well being and the quality of the houses that they live in. This is why a direct causal relationship has been established between affordable housing and good living standards in any country. For an Administration like ours that has poverty alleviation and sustainable economic growth as its central policy thrust, therefore, mass provision of housing is a strategic tool for creatively simulating the economy and generating prosperity.

3. There is no doubt that on paper, there had been well-laid out policies by successive Federal and State Governments to provide affordable housing for our population. Unfortunately, the acute housing shortage and the attendant inability of majority of Nigerians particularly in urban areas to own or rent affordable and decent house reflects the failure of such policies. The persistent inability of past housing policies to effectively provide houses for the ordinary, hard-working and aspiring citizen has been primarily due to the absence of a strong, predictable financial frame work such as a secondary mortgage market and general institutional weakness inherent in the regulatory and legal systems.

4. In the same vein, both Federal and State Governments have in the past realised the provision of housing as a veritable cornerstone for development. They have consequently embarked on one programme or the other to provide housing or housing loans for Civil Servants and Citizens through housing Corporations, Staff loans and the direct sale to people of completed houses or serviced plots within estates. However, these have tended to be no more than ineffectual drops in a vast ocean of homelessness; they are generally of low quality and are tied to available funds rather than access to long term credit. These schemes have more often than not been ineffective and too expensive for the ordinary man.

5. It is of common knowledge that past efforts at providing accommodation for the masses had often been hijacked by the privileged high and middle class elite during the allocation process due to inherent problems. This class would turn round to rent the same houses to the low income group for whom the houses were meant in the first instance. Though such houses were generally referred to as “low–cost”, they were priced out of the reach of their proposed beneficiaries with the consequence that those for whom the houses are intended as owners always end up as tenants paying rent without any equity or ownership because of the cash and carry nature of the sales package.

6. In our characteristic methodical and painstaking manner, we studied the problem critically in order to address its root causes rather than the symptoms. We concluded that the problem was not with the pricing of the Houses as the high cost of building materials were there to contend with, but that majority of the low income group could not come up with the full cost of the building at a go unless they had recourse to Bank loans. Apart from biting high Bank interest rates on loans, majority were also in no position to provide the required collateral to secure the loans. We therefore knew that we had to put on our thinking caps and come up with fresh and more effective initiatives to make homelessness history for the greater number of our people. In doing this, we learnt the appropriate lessons from the experience of those advanced countries that utilised the provision of mass housing as a launching pad to unprecedented prosperity. The fruit of our intellectual labour is this Mortgage Scheme which we have delivered to transform the housing landscape of Lagos radically and liberate millions of our people from poverty.

7. During the launching of the Lagos mortgage scheme, I did assure you of my administration’s determination to bring into focus a pragmatic approach that would herald a fundamental change in housing programmes in the State. This new approach which is being consummated today is based on modern financial structures that will enable honest and hard-working Nigerians to own affordable and decent homes without the need for graft, unmanageable loans and self-denial on a criminal scale. We are proving again today that we do not make empty promises. Every word we utter is binding on us and will go the extra mile to ensure its redemption. We are equally not scared to take on daunting challenges and to embrace seemingly difficult solutions if we are convinced it is in the best interest of our people and the route to taking Lagos to the next pedestal of excellence.

8. We have decided to take the bull by the horn by utilising the secondary mortgage market as an effective tool of solving the persistent housing crisis in Lagos State, radically stimulating diverse sectors of our economy and creating a prosperous economy. This is borne out of our conviction that governments should not be competing with primary Lenders and property developers in the actual delivery of housing as they have neither the managerial ability nor efficiency levels to deliver the kind of capacity that current demand for housing requires.

9. Today’s ceremony is in fulfilment of my promises and a way of show casing to the entire world, our sincerity and commitment to the provision of affordable houses for Lagosians starting with Civil Servants who occupy various Staff quarters at different locations in the State. At this ceremony, three hundred and seventy-six (376) serving officers who qualified for the first phase of the Lagos Mortgage Scheme would be formally presented letters of allocation. As the programs is systematically implemented, other categories of public officers will benefit from subsequent allotments.

10. I have no doubt that this scheme will significantly boost the confidence, self esteem, productivity and integrity of our public service, which is already clearly in a class of its own in Nigeria. However, I must stress that this is a scheme for all Nigerians in Lagos State whether in the public or the private sector of the economy. Although we are starting with public servants in the pilot scheme, it is an initiative which every gainfully employed person in this state should take advantage of to liberate them from shelter-dependency and create the basis for prosperity for their families.

11. To put this whole exercise in the right perspective, it is necessary to state here that the funds being given out on mortgage are provided by Banks and not by Government. The involvement of your Government is to assist in negotiating a good interest rate and ensure the availability of the funds required on reasonable and concessionary terms. We are presently collaborating with four (4) Banks namely:
a. Skye Bank
b. Access Bank
c. Oceanic Bank
d. First Bank

12. These Banks have provided the seed fund of N40billion to jump start the Scheme and have agreed to reasonable waivers of some stringent conditions for the benefit of the Scheme. I am confident that not only would they be prepared to inject more funds as the need arises but other Financial Institutions will buy into the Scheme as its successes unfold over the months and years.

13. I congratulate the stakeholders especially the pioneer beneficiaries of this laudable Scheme. I hope it will propel them and other prospective beneficiaries to higher productivity in their respective places of employment. It is indeed my pleasure to be here to formally present the first beneficiaries with their offer letters to mark the official commencement of the Lagos State Mortgage Scheme.

14. Thank you and God bless.

Eko O Ni Baje O.

Babatunde Raji Fashola (SAN),
Executive Governor,
Lagos State