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Business News

Hope rises for workers as CBN partners PenCom to make home ownership easier

The average Nigerian worker’s dream of owning a house they can call their own brightened on Thursday at the banker’s committee meeting held in Abuja.

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Lagos says defaulting allottees of housing schemes in Lekki, Ikeja, others to lose houses, real estate, Proposed NHF Law takes a twist, as top Nigerian experts differ on its impact, Richard Olodu, affordable homes 

The average Nigerian worker’s dream of owning a house of their own was reinforced on Thursday at the banker’s committee meeting held in Abuja.

During the meeting, the Managing Director of FSDH Merchant Bank, Ambah Hamda, disclosed that the Central Bank of Nigeria has plans to work in synergy with the Pension Commission (PenCom) towards ensuring that contributors to the Retirement Savings Account access 25% of Nigeria’s N9.03 trillion pension assets for mortgage purposes. This will be in conformity with the 2014 PenCom Act.

Shedding more light on this plan, the FSDH MD stated the following;

“Once it becomes a reality, an RSA holder will then be in a position to walk up to his pension fund administrator and ask to access 25 percent saved up in his name and would like to borrow money to build a house.

“With such approval, you will then approach your banker. It would make the bank very willing because you will then be coming with a sizeable sum of money where you would also contribute to the project.”

Meanwhile, CBN’s Director of Corporate Communications, Mr. Isaac Okoroafor, who also spoke during the event, noted that the 25% pension contribution would ultimately constitute workers’ equity contribution for mortgage. Workers will then approach their banks who will finance the 75% balance.

Why this matters: Apart from the fact that the scheme will enable Nigerians in the public service and the organised private sector to become homeowners, it is also expected to help significantly reduce the country’s housing deficit.

A 2018 report credited to Centre for Affordable Housing in Africa had put the country’s housing deficit to be between 17 and 20 million. 

Similarly, the plan will help to unlock the huge potential in the real estate sector of the economy by fostering rapid growth and providing funding. In so doing, several direct and indirect jobs will be created.

As Hamda noted that “25% of N9 trillion is worth over N2 trillion and this fund can be used to stimulate demand for mortgage loans in our economy.”

She further disclosed that the CBN will make the process easy by working with other regulators and “with the government of various states to make the whole process of land transfer and titling a lot easier so that many more people across the nation can access mortgage financing, thereby stimulating demand in our economy.”

Ronald Adamolekun is a creative writer with proficiency in journalism, financial reporting, financial analysis and imaginative writing. However, his core competency lies in fiction and short story writing as well as feature writing. He is a graduate of English and Literature from Covenant University, Ota, Nigeria.

1 Comment

1 Comment

  1. Ebiwari Agedah

    June 14, 2019 at 3:57 pm

    Pension Fund significant contributions to the economy of Singapore cannot be overemphasized.
    We need to study the Singapore Pension Fund system and do the needful for workers in Nigeria.
    This is a welcome step that needs to be implemented without any delay to help alleviate the sufferings of Nigerian workers.
    When this takes off you would not see many people roaming the streets of our nation Nigeria any more.
    The construction industry employs more people that the much talked about agricultural sector.
    CBN/PFA please move swiftly to ease the burden off the shoulders of Nigerian workers

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Consumer Goods

Sell-off of shares by investors extend Flourmillers loss on NSE to N25 billion

Nigerian Flour millers on NSE suffer a decline as wary investors offload shares.

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Bloody February: Sell off of shares by investors extend Flourmillers loss on NSE to N25 billion

The sell-off of shares on the Nigerian Stock Exchange has triggered an N24.9 billion loss in the market capitalization of Flour Millers since the beginning of February, as wary investors offload.

It is important to note that the Nigerian Equity Market has been on the downward trend since the beginning of February, as wary investors sell off stakes in companies as the yields in the money market become attractive.

The results of this move led to a decline in the shares of companies listed on the Nigerian Stock Exchange, including a decline in the shares of Flour millers listed on the bourse.

A review of the performance of the stocks of these Flour millers on NSE revealed that the market capitalization of FLOUR MILLS, HONYFLOUR, and Northern Nigeria Flour Mills from the open of trade on February 1 till the close of trading activities on February 24 has declined from N154 billion to N129 billion.

How they have all performed

FlourMills has declined from N142.3 billion to N118.3 billion. However, the market cap of Honeywell Flour Mills has also declined, albeit marginally from N10.31 billion to N9.91 billion, while that of NNFM has declined from N1.72 billion to N1.25 billion. When added up, the three millers have lost N24.85 billion in market capitalization.

However, Flour Mills, the largest miller on NSE lost the most with N23.98 billion, as a percentage of market capitalization. Flour Mills is down by 16.85%.

Market activity

At the end of trading activities on the floor of the Nigerian Stock Exchange, the shares of Flour Mills declined by 6.9% to close at N28.85 per share, as investors sell off 5,029,161 ordinary shares of the company worth N143,009,264.10.

Shares of Honeywell at the close of trading activities today declined by 1.6%, while shares of Northern Nigeria Flour Mills remained unchanged at N7.02 per share.

The Consumer good index to which the Flour millers belong has fallen by 6.1% year since the beginning of February, compared to the Nigerian Stock Exchange All Share Index -5.17%.

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Business News

FG says Finance Bill 2020 will check inflation

The Finance Minister has stated that the reduction of import duties on vehicles will subsequently reduce transport fares and food prices.

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Power: Mambilla Power Project not prioritised by Ministry of Power for 2021 Budget - Finance Minister

The Federal Government has said that the Finance Bill 2020 was designed to reduce import duties on some commodities, including vehicles, thereby checking inflation.

This is as the Bill was part of measures to make transportation affordable, thereby reducing the cost of foodstuff across the country.

According to a report from the News Agency of Nigeria (NAN), this disclosure was made by the Minister of Finance, Budget and National Planning, Zainab Ahmed, while answering questions from State House correspondents in Abuja on Wednesday.

Ahmed explained that her Ministry advocated and got approval for a reduction in the import duties charged on vehicles precisely to check inflation trends.

READ: FG to withdraw $150 million from sovereign wealth fund, to borrow $6.9 billion

What the Minister for Finance is saying

The Minister expressed concerns over the inflation rate in the country, saying inflation was high at 16.7% and still inching up gradually over the last couple of months.

Ahmed said, “When you look at the components that constitute inflation in our country, the largest contributor is food inflation and … if you decouple it, the largest contributor to food inflation is the cost of transport.

“We now look at how do we reduce the cost of transport because we can’t give every Nigerian money to pay for their transportation fares. We figured that one of the good ways to do it is to increase the acquisition of mass transit vehicles and to reduce the acquisition cost of vehicles and tractors that are used for productive purposes like agriculture.”

READ: Nigeria to receive first tranche of World Bank’s $3 billion loan soon

She expressed optimism that the reduction of the import duties on vehicles, when fully operational, would boost mass transit activities and subsequently reduce transport fares and food prices.

She said, “So the reason why we reduce those duties is to reduce the cost of transportation.

”So, once this implementation takes full effect, we are hoping that we’ll be able to see more tractors coming into the country, more mass transit buses coming to the country, reducing the cost of transportation as a result, and also having an impact on food prices.

What you should know

  • It can be recalled that as part of its bid to introduce tax incentives in the face of the economic downturn caused by the coronavirus pandemic, the Federal Government in November 2020, through the signed Finance Bill 2020, proposed the slash of import duties for tractors, buses and other motor vehicles from 35% to 10% and 0% to further help cushion the socio-economic conditions in the country.
  • The Minister for Finance, Budget and National Planning had explained that the need to reduce food inflation figures through one of the causative factors of high production cost, which is transportation, inspired the bill.

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