Arc Ahmed Dangiwa, MD FMBN
By Johnson Eze
When people admire cities with skyscrapers and housing estates springing up all over the place, little do they realize there are institutions working assiduously behind-the-scene to make things happen? Like the Newtonian law of motion rightly states everything remains static if nothing pushes or pulls it.
Nigerian cities like Lagos, Abuja, Port-Harcourt, Ibadan etc. are at different times rated among Africa fastest growing. The growth to a large extent is in form of housing, infrastructure and population. Nigeria with the population of about 180 million expectedly has invested a lot of resources in building homes and offices that accommodate its population.
Behind this success story in the Nigerian housing sector is the Federal Mortgage Bank of Nigeria FMBN, Nigeria owned mortgage development and regulating giant financing the vast majority of the housing developments in the country directly or indirectly.
With the advent of President Buhari administration, the organisation, without doubt, has imbibed new strategies for, system and speed of tackling emerging challenges in the housing sector which many industry watchers believe has been repositioned it for great prospects.
Ably led by a seasoned and experienced Arc Ahmed Dangiwa as the Managing Director and Chief Executive Officer with full complement of thorough bred technocrats as departmental directors, the organization is adequately poised to breaking new grounds in Mortgage business across the globe.
Established in pre-independence Nigeria with the name, ‘Nigerian Building Society (NBS) in 1956 as joint venture of the Commonwealth Development Corporation (CDC), Federal and Eastern Government of Nigeria, it became an estate business firm when the country’s quest for growing the housing sector was still relatively at lowest ebb. However, following indigenization decree of 1973, NBS was acquired by federal government of Nigeria and renamed Federal Mortgage Bank of Nigeria. FMBN,
Subsequent reforms and restructuring elevated the FMBN to an apex mortgage institution in Nigeria, notably: promulgation of the FMBN Act 82 of 1993and the mortgage institution Act 53 of 1989.
It later commenced the management and administration of contributory saving scheme known as the National Housing Fund (NHF) established by Act 3 of 1992. The fund is a social saving scheme designed to mobilize long term funds from Nigerian workers, banks, insurance companies and Federal government to advance concessionary loans to contributors. In fulfilling its mandate, the bank is to establish capital market instruments such as mortgage-backed bonds and mortgage backed securities for sale to institutional investors such as pension funds, insurance companies, security companies and banks to raise long term funds for its secondary mortgage lending activities. This is to ensure sustainable supply of liquidity to finance first home mortgage loan organizations
Following the reforms of the Nigerian Housing sector, FMBN was further restructured into a federal government structured enterprise (FGSE) with more focus on its secondary mortgage and capital market functions. FMBN is shifting operational emphasis to expand its functions from solely social housing on-lending under the NHF to other areas of business including commercial on-lending for housing, refinancing of commercial mortgage created by mortgage loan originators, mortgage purchasing and warehousing and mortgage-backed securitization.
The bank’s current business model targets partnership with local and international organizations with financial and technical capacity interested in delivering affordable mass housing for the low income end of the market.
While FMBN is said to have been carrying out its mandate effectively to a very large extent which gave rise to so many housing estates completed in many cities across the country, the coming on board of Arc Dangiwa-led management marked a historical point in the fulfilment of the goals of the institution. This is in view of the high degree of competence he has brought to bear in tackling fundamental issues in the functions of FMBN, hence putting smiles on the face of interested home owners. Economic pundits, going by comments in media space, say that if things can continue this way within the sector in the nearest future, Nigeria will rank among world best in the industry.
For instance, no sooner did not take long that Arc Dangiwa assumed office than he collaborated with the House of Representatives to investigate breaches of the National Housing Fund Act 2004 of the bank leading to Trillions of Naira backlog as it was discovered that banks, have not been investing to the fund. Outcome of the public hearing is expected to make multiple increases to the number of investors to the fund and by extension make available more funds for the business of FMBN.
Another strategic move is on improving affordability of housing in the sector. Like the American professor of sociology, Mathew Desmond remarked in his book while trying to underscore the importance of affordability in housing, “it is hard to argue housing is not a fundamental human need. Decent, affordable housing should be a basic right for everybody in this country. The reason is simple, without stable shelter everything else falls apart”.
Arc Dangiwa-led management of FMBN to a great extent shares in this belief of making housing affordable. According to its Managing Director and Chief Executive Officer, the issue of affordability is the major reason estates built by FMBN in 10 states are still unoccupied. This was disclosed when the MD hosted a 9 man delegation of Nigerian Economic Summit Group, NESG, led by its President Engr Kashim Ali at FMBN headquarters in Abuja on an interactive visit. “Despite efforts to construct the homes at cheaper rates the houses are still not accessible” the MD lamented.
He however disclosed that FMBN has a strategic plan of partnering with states government in providing infrastructure to the affected estates to reduce the entire cost. The MD also added efforts are on-going to implement rent-to-own initiative. While clarifying that the bank is the last resort to a common man to own a house, he revealed that FMBN will partner with Nigerian Labor Congress NLC to design cheaper homes and reduce housing cost to ensure affordability.
Among other mouth-watering achievements of Dangiwa-led management is the review and implementation of conditions for accessing housing loans which now includes zero equity for provision of loans for up to N5 million and 10% contribution for housing loans ranging from N10 to N15 million by contributors to the NHF. To boost service delivery by making more fund available for projects implementation, the bank is also ambitiously pursuing recapitalization to the tune of N500 billion.
Furthermore, to ensure that disbursed loans are repaid to enable the bank remain in business, it has stepped up its debt recovery efforts and is partnering with the Special Presidential Investigation Panel for the Recovery of Public Property, a plan the bank believes could recover N43 billion in the next 18 months. So far, the bank debt recovery efforts yielded N2.5 billion in 2017 and N3 billion in 2018.
It is also noteworthy that through the proactive effort of the management, two legislative bills are currently at the National Assembly improve operational activities of the bank as a foremost property financing institution
With all these newly introduced initiatives shaping the activities of FMBN in responding to the housing needs of Nigerians, stakeholders in the sector are optimistic it will not be long for the much touted housing deficit to be bridged.