The Federal Mortgage Bank of Nigeria (FMBN) launched a National Housing Fund (NHF) Diaspora Mortgage Loan in London on Friday 7 August. They claimed it was “a secure and institutional pathway for Nigerians living abroad to own homes and invest in Nigeria’s housing sector”.
The scheme will allegedly “enable Nigerians abroad to register and access mortgage financing digitally without travelling to Nigeria”. The financing will be “up to N100m at 9% interest, with up to 10 years repayment, supporting homeownership, housing development and job creation”.
First warning sign that this is a scam
Minister of State for Housing and Urban Development Yusuf Ata flew all the way to London for the launch. Also present were the Permanent Secretary of the Ministry of Housing and Urban Development, Shuaib Belgore, the Chairman of the Nigerians in Diaspora Commission (NiDCOM) Abike Dabiri-Erewa, and the Director, Development Finance Institutions Department, Central Bank of Nigeria (CBN) Ali Baba. The aptly-named Ali Baba appears to be operating with 40 thieves. The launch of a loan scheme surely doesn’t need an all-expenses paid foreign junket for all these people, unless there is more to it than meets the eye.
Nigeria High Commissioner to the UK Aminu Dalhatu (middle) with Abike Dabiri-Erewa
Second warning sign of scamming potential
The Presidency was able to set up a bogus government agency, with government offices, staff, won approval to hire 300 more staff, a line in the federal budget, etc. This makes setting up fictitious accounts to secure loans for fictitious homes would be like a walk in the park. We warned about the potential for fraud with a student loans scheme in Nigeria when it was launched over three years ago. Not much has been seen or heard about the scheme since. And it is possible that funds have been disbursed to fictitious students.
Nigeria’s universities need free tuition not interest-free loans
Third red flag
Nigeria has a massive housing problem. As we highlighted in March: According to official figures, the country needs 28m homes to meet demand and Abuja accounts for about 10% of that demand. Nigerian banks offer precious little commercial lending in the form of mortgages, hardly surprising with interest rates of around 26.5%. This means owning property is beyond the reach of the majority.
Abuja’s housing crisis – a war against the poor in Nigeria’s capital
When government officials dream up a scheme that doesn’t focus on what they were elected to do, but on a white elephant, follow the money and you will see it being diverted into private pockets. The Nigerian constitution states in Chapter 2, Section 16(2)(d) that government at all levels has an duty towards ensuring “that suitable and adequate shelter …. are provided for all citizens”. A loan scheme for Nigerians abroad, who already have homes in those foreign countries, should never be a priority for any government when there a severe housing shortages for citizens living in Nigeria and chronic affordability problems.
As we said in March, the focus should be on widening access to decent housing for Nigerians in Nigeria with steps such as:
- a government house-building programme for those on low income,
- a government-backed or owned mortgage scheme with affordable interest rates,
- some form of means-tested government support for those in the private rental market,
- a shared ownership scheme in which government shares the equity in a home with individuals, making the percentage of the equity owned by the individual affordable.
- Serious consideration should be given at state and municipal levels to introduce rent controls to curtail soaring rents.
A serious government should divert this diaspora loan scam to the needy in Nigeria – people that actually need affordable housing. Nigerians abroad don’t fall into this category. They are only being used as a cover to loot funding for the loan scheme. It’s another case of diverting scarce for funds for the needy to the greedy.
