The Pension Fund Operators Association of Nigeria (PenOP) has expressed its belief that the new policy introduced by the National Pension Commission (PenCom) allowing the use of 25 per cent of Retirement Savings Account (RSA) balances for mortgages will significantly reduce Nigeria’s substantial housing deficit.
As of 2023, Nigeria faces an estimated housing deficit of 28 million units, highlighting the need for substantial efforts to meet the population’s housing needs.
Experts say around N21 trillion is required to bridge this deficit, making it clear that a significant investment is necessary for the real estate sector to provide adequate housing for the entire population.
Speaking at the 2023 journalists workshop organized by PenCom in Abuja, the chief executive officer of PenOp, Oguche Agudah emphasised the potential impact of the mortgage financing policy on housing shortfall. PenOp serves as the umbrella organisation for all licensed Pension Fund Administrative firms in Nigeria.
Delivering a paper titled “Improving Accessibility and Service Delivery in RSA Mortgage Financing,” Agudah pointed out that Nigeria’s housing deficit had grown from seven million units in 1991 to 28 million units in 2023, resulting in overcrowded and outdated housing infrastructure.
Represented by Akinbola Akintola, Research & Investment Lead at PenOP, Agudah stated, “According to the Association of Housing Corporations of Nigeria (AHCN), the homeownership rate in Nigeria is 25 per cent, one of the lowest in the world.”
The new mortgage policy from PenCom allows RSA holders to use 25 per cent of their pension savings to acquire their own homes, enabling individuals to own properties even before retirement. Since the policy’s inception last year, 187 RSA holders have received a total of N3.1 billion for mortgages, and this number is expected to increase throughout the year.
Furthermore, Agudah highlighted an important provision of the policy, explaining, “One of the outstanding provisions of the Policy is that couples can apply, however, they must individually be individually eligible.”
