FG plans to raise $3.3 billion mortgage fund

Vice President Yemi Osinbajo has said the Federal Government plans to raise a fund worth N1 trillion ($3.3 billion) to finance mortgages for low-income earners with the help private investors.

Africa's most populous country, home to more than 180 million people, suffers from a housing shortage. Few banks offer long-term mortgages as high interest rates make them unattractive for buyers and risky for lenders worried about defaults.

"It's actually a financial intervention fund ... Already we are trying to aggregate funds from the private sector, local and international investors," Vice President Yemi Osinbajo told a business conference in Abuja, without giving a timeframe.

"The idea is that any Nigerian who earns at least 30,000 Naira ought to be able to own a home," he said, adding that the developers would be able to use the mortgages raised by the fund to build affordable housing. He gave no more details.

Officials have said Nigeria needs to build around 17 million houses annually to catch up with a fast-growing population which is set to more than double to 400 million in 2050, according to U.N. estimates. Nigeria will be then the third most populous nation after China and India.

Meanwhile, the Federal Government also plans to sell 138.16 billion naira ($454.47 million) in short-dated treasury bills at an auction next Wednesday, the central bank said on Tuesday.

In a public notice, the bank said it would raise 36.78 billion Naira in three-month papers, 35 billion naira in six-month bills and 66.38 billion naira in one-year bills. Payment for the purchases would be made on Thursday.

The government issues treasury bills to raise cash to fund the budget deficit, manage banking system liquidity and curb rising inflation. (Reuters)