By Dipo Olowookere
The Central Bank of Nigeria (CBN) has disclosed that the mortgage industry can raise the country’s Gross Domestic Product (GDP) to 70 to 80 percent.
This was the view of the Director of Other Financial Institution Supervision Department (OFISD) of the CBN, Mr Ahmed Abdullahi at the 12th edition of annual Mortgage Banking Sub-sector CEOs’ annual retreat held in Abuja on Saturday.
The event, organised by the Mortgage Banking Association of Nigeria (MBAN), is with the theme, ‘Mortgage Banking Sub-sector as a tool for Economic Development: Increasing Homeownership in Nigeria.’
Mr Abdullahi noted that investment in housing construction would accelerate growth in other sectors on the value chain and subsequently jerk up the GDP.
He argued that the increasing stock of affordable housing would accelerate the growth of middle-class, deepen the mortgage market and increase aggregate demands, stressing that the industry could contribute to social and political stability.
The CBN top shot said, “Housing finance can also have desirable spill-over effects on both the financial system and social cohesion, as only 5 percent of existing housing stocks are estimated to be financed by mortgages, while houses are personally built 100 per cent with savings in Nigeria.”
According to him, the absence of long-term capital and poor business environment as the major constraints to the growth and development of Nigeria’s mortgage market, stressing that the industry was under-developed, with total assets of only N386bn as at June 2016, representing 0.24 per cent of the GDP, compared to 70 per cent in other jurisdictions.
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