The News
Nigeria is creating a 1 trillion naira ($650 million) fund to provide low-interest mortgages and spark a “construction boom” in Africa’s most populous country, its finance minister said.
Wale Edun told reporters that for the first phase of fundraising, the government had taken out a 40-year loan from the World Bank’s International Development Association at an interest rate of 1%, matched by private sector funding from pension funds and banks to raise 250 billion naira. The mortgages, which will be available within weeks, will be of “single-digit or low double-digit interest rates” for around 25 years, he said.
Mortgage lending is a small portion of the country’s property market, as in other parts of the continent, and loans typically require hefty deposits with interest rates of about 20% for a 10-year period. As a result, most property is bought in cash. Research suggests most Nigerians live in rented accommodation.