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Presidency chooses 14 States to kick-start Mortgage Refinance Company

By The Citizen
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 The federal government had selected 14 states for the pilot phase of the proposed Mortgage Refinancing Company (MRC).

The Coordinating Minister for the Economy and Minister of Finance, Dr Ngozi Okonjo-Iweala, Thursday disclosed this in a lecture tagged: 'A Century of the Nigerian Private Sector,' organised by the Lagos Chamber of Commerce and Industry (LCCI) in Lagos.

Okonjo-Iweala stressed the need for a functional mortgage system, saying that by the end of November, President Goodluck Jonathan would launch the MRC.

The finance minister added: 'The World Bank last week approved the $300 million liquidity facility for that. The objective for that is to use this as an instrument to drive the housing sector. We are doing this by taking 14 pilot states that have promised to make land available.

'The states will provide certificate of occupancy in weeks, not months. They have to meet all these criteria in order to participate,' she explained.

Also, as part of efforts to address the difficulty faced by businesses in accessing finance in the country, the finance minister reiterated that the federal government would soon set up a development finance institution to wholesale money to commercial banks and specialised banks, in order to support the private sector.

She explained: 'We will create this institution in the next 18 months. The African Development Bank (ADB) is putting in another $400 million into it. We are trying to raise the money to do it long-term and at reasonable interest rate so that we can bring down the cost of borrowing.

'When we get this, it will drive down the cost of finance. We are not going to dictate to banks how much they charge; we will simply put up a system that will provide enough resources for long-term financing. A lot of multilateral institutions are supporting us and this thing is going to happen. So give us 18 months.'

According to Okonjo-Iweala, with the successful sale of the power assets, the federal government had launched a private sector-driven power market by selling off the power assets.

'We still have 11 power companies to sell through the National Integrated Power Projects, after we have disposed all those assets.

We are keeping transmission and on that transmission, an emergency programme to make sure we keep up the transmission has been launched. We are to raise $1.9 billion to get that moving so that even on that one, we have on our hand, we are not slacking.

“We have raised $1.5 billion of the $1.9 billion needed for emergency transmission. The African Development Bank has agreed to put in about $400 million into that emergency cash raising over the next three years, World Bank will put in $700 million and others are coming in to support us. Part of the money from the Eurobond is going into that,' she declared.

The finance minister insisted that corruption was not the biggest problem in doing business in the country.

According to Okonjo-Iweala: 'Our revenues and gross domestic product growth that were so volatile in the past are no longer so. The economy is doing well, it is strong. We may experience cash flow problems from time to time, but that does not amount to an economy that is not strong.'