The Pension Fund Operators Association of Nigeria (PenOp) has said that the policy by the National Pension Commission to use 25 per cent of Retirement Savings Account (RSA) balance for mortgage would reduce the current housing deficit in the country.
Chief Executive Officer, Pension Fund Operators Association of Nigeria (PenOp), Oguche Agudah disclosed this while speaking at the 2023 journalists workshop organised by the PenCom in Abuja.
TheFact Daily reports that Nigeria has a significant housing deficit, with an estimated 28 million housing units needed to address the problem.
The deficit has grown progressively from 7 million housing units in 1991 to 12 million in 2007, 14 million in 2010, and 28 million housing units in 2022.
The rise in rural-urban migration has exacerbated the housing challenge, stretching the limited public infrastructure in urban centers.
The Central Bank of Nigeria has estimated that ₦21 trillion will be needed to finance the deficit.
Industry Experts have predicted an over 60% rise in the housing deficit by 2050, on the back of rising population and urbanization worsened by economic conditions.
However, the PenOp boss was optimistic that the mortgage financing policy by PenCom would go a long way in closing that deficit.
Agudah while delivering a paper on Improving Accessibility and Service Delivery in RSA Mortgage Financing.” noted Nigerian housing deficit grew from 7 million in 1991 to 28 million in 2023 leading to overcrowded and obsolete housing infrastructure.
Represented by Akinbola Akintola
Research & Investment Lead at PenoP, he said, “According to Association of Housing Corporations of Nigeria (AHCN), home ownership rate in Nigeria is 25%, one of the lowest in the world.
“As such, the new mortgage policy of PenCom, RSA holders could acquire their own home with 25 percent of their pension savings, and will further ensure that people acquire properties even before retirement.
“So far 187 RSA holders have received N3.1 billion for mortgage since the policy stated last year and the figures are expected to to rise as the year progresses,” he explained
Speaking further Oguche added that “One of the the outstanding provisions of the Policy is that couples can apply, however they must individually be individually eligible”.
PenOp is the umbrella body of all the licensed Pension Fund Administrative firms in Nigeria.