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Business News of Sunday, 2 May 2021

Source: Naira Metrics

Real estate: What operators, CBN must do to boost contribution to GDP

It is no longer news that the Nigerian real estate sector contracted by -9.22% in 2020. What is important is figuring out what must be done by operators, stakeholders and the government to better position the sector to contribute more to the nation’s Gross Domestic Product (GDP) in 2021.

For the sector to move from a contraction of -9.22% in 2020, according to the National Bureau of Statistics, to sustainable growth, experts gathered at the recent webinar, organised by the Mortgage Bankers Association of Nigeria and highlighted what must be done.

One of the challenges that if addressed would drive the sector in 2021 is the lack of required investment in technology to ease loan processes.

Deputy Governor, Central Bank of Nigeria, Mrs Aishah Ahmad, represented by the Director, Other Financial Institutions Supervision Department (OFISD), Mrs Nkiru Asiegbu, explained that investment in technology to drive mortgage loan origination processes is very imperative for mortgage banks and brokerage companies.

She said, “Primary mortgage banks need to take the required steps to optimise the adoption of technology with a view to adapting their business strategies to the changing customer demography and expectations.”

According to her, the banks should also collectively develop a road map towards a stronger profitability outlook for the industry.

President, MBAN, Mr Adeniyi Akinlusi agreed with CBN on the importance of technology and how it would aid the desired sustainable development.

He said, “Automation would be the best way to ensure competitiveness and efficiency in the sub-sector. Technology would drive mortgage loan origination processes and that is very imperative for the mortgage banks and brokerage companies.”

They also implored the CBN to fast-track implementation of the Mortgage Interest Draw-Back Programme (MIDP), together with other policy measures that would moderate the cost of funds to single digit, on a consistent and sustainable basis.

Specifically, MBAN urged CBN as part of COVID-19 palliatives and intervention, to provide the residual equity capital of 75% that would complement the existing share capital of 25% already subscribed by NMRC for immediate take-off of Nigeria Mortgage Guarantee Company Plc (NMGC) due to its envisaged impact on mortgage banking in the country.

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