The
importance of housing can be seen in its place in the 1999 constitution of the
Federal Republic of Nigeria. S.16 (I)(d) provides as one of the fundamental
objectives and directive principles of
the Nigeria state policy, the provisions of suitable and adequate shelter for
all citizens, the same was made in the 1979 constitution ( Nigeria constitution
1979, 1999 and FMBN 2006)
Continuing
the FMBN bulletin 2006 stated that FMBN Act 1993 and the Mortgage Institutions
Act 1989 all fell short of desired impact on housing and Mortgage industry. The
National Housing Policy 2002 according to FMBN is to ensure that all Nigerians own
or have access to decent, safe and sanitary housing accommodation at affordable
cost and secure tenures. But this is not been achieved, as NHF has been
involved in the refund of contributions which cannot afford enough blocks talk
less of building houses.
Therefore
there is that urgent need for infrastructural development, a case of housing as
most retirees are faced with the great task of building their own houses. In an
article on 15 costly mistakes pensioners make, Odunze (2014) in the
verynewsinfo.com highlighted that one of the pension mistakes is using
retirement money to build a house after retirement. It should be noted that
building houses after retirement aggravates the retiree health as the
retirement money is not enough to erect
a house coupled with the ignorance of the retirees who thought that they
will be paid everything in the
retirement savings account balance only to hear the bitter truth of the
provisions of the Pension Reform Act
2004 for 25 percent. And so the
need for such housing development cannot be over-emphasized as in all
investments instruments, it is investment in housing that appreciates
astronomically. In an article in the Telegraph Newspaper of London, Richard
Dyson noted in article captioned “ £1,250bn and rising ,
how buyer to let is overtaking Pension” that “The value of
property owned by Britain’s growing army of buy-to-let investors is fast
approaching the value of the entire workforce’s pension savings built up over
decades of employment. At £1.25 trillion
– £1,250bn – the value of the flats and houses owned by almost two million
small-time landlords is catching up on the £1.6 trillion total amassed in workers’
pension schemes.“
In a
recent announcement while announcing the world pension summit, the Acting
Director General of National Pension Commission, Chinelo Aholu stated that the
pension assets has hit 4.3 Trillion and still counting. That provides enough
investment outlay for infrastructural development in housing.
The
Former Governor of the Central Bank, Mr. Sanusi had canvassed for the use of
the fund for infrastructure development. In an article in Punch 2011 captioned
”Safeguarding Pension Funds” it reported
that the Central Bank Governor has canvassed for the use of the pension fund in
rescuing the decayed infrastructure , however the paper was quick to add “but
this should be discouraged because of the underlying factors of mismanagement”
continuing it states that as “plausible as this idea may seem to have, are
problems of corruption, inflated contracts and abandoned projects which may
threaten investments in such areas. The paper concluded that it is necessary to
“avoid a situation where money may not be available when pensioners are ready
to collect their life savings” All these
stems from fear of the unknown which I don’t blame them because corruption had
at one time or the other affected, the smooth running of some laudable
policies.
Be as
it may , it is a good proposition but do we because of fear of corruption allow
the retire to suffer in using the
pension to start building a house and the risk of inflation on the said fund,
bearing in mind that the majority of the retirees still use the retiree fund to
build houses. The result is more abandoned project as most retirees are the
last phase of their circle of existence and may not be able to complete such
projects.
In most
developed countries in Europe and America, pension fund are being used for
infrastructural development especially in the area of housing. But what they do
here is that they build houses for lease and rent, and non is used for outright
sale. They discovered that of all investment in life, it is real estate that
has the highest rate of return. As a house that was bought in 2012 for 5
million cannot be sold for the same amount even within a period of 3 months. As
both land and building appreciates over a period of time. Jerry Lewis, the owner Macdonald, once stated
that he is getting his wealth through real estate and not through the
restaurant.
Since
the masses are afraid of corruption ravaging the fund, if it used for infrastructural
development, they can work out the following:
The
retirement saving balance can be used to access mortgage under strict
compliance
The
commission in conjunction with PFA and PFC can embark on massive housing
project with part of the fund as a way of ensuring housing for all.
Let us remember
and bear in mind the words of Richard Dyson that “ while traditional pension
saving is complex and unpopular with many, the phenomenon of buying-to-let is
now growing at its fastest rate ever, spurred by rising rents and house prices
and cheap mortgages.” Will the pensioners be able to afford the rising prices
of houses and rents knowing quite alright that if they know they can’t afford
it at their point of retirement they make resort corruption during their
working life.
Odunze Reginald
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