The Federal Executive Council has approved an initiative aimed at transforming the nation’s infrastructure and housing sector.
The initiative, as approved by the council, is tailored to meet the urgent demand for critical infrastructure and affordable homeownership, fostering job creation, inclusive growth, and long-term productivity enhancement.
The council gave its nod to the initiative at its meeting at the State House in Abuja on Tuesday.
The initiative will unlock private-sector funds, which Nigerians can access for 25-year mortgages at low interest rates to realize their dream of owning a home.
At a press conference after the meeting, the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, explained the importance of innovative collaborations between the private sector and Sovereign Owned Enterprises (SOEs) like the Nigeria Sovereign Investment Authority (NSIA) and the Ministry of Finance Incorporated (MoFI).
He said such partnerships are envisioned to strategically channel funding to high-impact areas, ensuring impactful economic outcomes for the people.
“This alliance signifies a significant step towards driving sustainable development and economic growth in Nigeria by leveraging private-sector resources and expertise in strategic areas of need,” the Minister said.
The initiative aims to further strengthen the Federal Mortgage Bank and the Federal Housing Authority, enabling both public and private entities to fulfill their housing obligations. This collaboration is expected to boost the initial phase of the President’s Renewed Hope Cities project, with the aim of providing 50,000 units of homes across the country.
The partnership includes institutional investors creating mortgages within a framework overseen by the Ministry of Finance Incorporated to enable funding. This structure will streamline fund transfer from private investors to the housing sector, specifically the mortgage market, encouraging affordable homeownership opportunities.
The partnership will incorporate a specialized framework utilizing a special-purpose vehicle (SPV) owned by the Nigeria Sovereign Investment Authority. This structure will enable institutional investors to provide sustainable long-term financing with robust oversight, reducing risks associated with large-scale government projects.
The initiative also aims to ensure private-sector involvement in project governance, cost management, and asset delivery, offering tangible benefits to Nigerians while safeguarding investor interests. The infrastructure focus includes power generation, toll roads, and railway projects to align with the government’s economic goals.
Simultaneously, the federal government of Nigeria will concentrate on funding essential infrastructure to enhance project viability for private-sector participation.
Private-sector discussions and commitments indicate a potential mobilization of around N2 trillion in long-term financing for housing and infrastructure projects nationwide. This partnership holds the promise of numerous benefits for the Nigerian population.
By collaborating with private institutional investors, the President Tinubu-led government seeks to leverage the expertise and capital of private investors to accelerate the delivery of vital projects, driving sustainable development and economic progress for all Nigerians.
Chief Ajuri Ngelale
Special Adviser to the President
(Media & Publicity)
May 14, 2024
