The Nigerian Exchange Limited (NGX) said it has raised over N72 billion for real estate companies in 10 years just as it plans to launch an initiative known as Impact Board to address the lingering housing deficit.
Group Chief Executive Officer, Nigerian Exchange Group Plc, Oscar Onyema, stated this at the 16th Africa International Housing Show themed, ’Housing for All: The Role of Governments in Creating an Effective Enabling Environment’ held at the weekend.
Speaking on the role of the capital market in tackling the nation’s housing Issues, Onyema noted that the Nigerian capital market, which aids long-term capital formation, remains an engine for driving economic growth and development.
He pointed out that the market could play an active role in pooling the capital needed to boost the development of the housing sector in the country.
Therefore, he called for an urgent need to promote the use of existing and new instruments in the market that can be used by developers, private sector participants, governments, and other stakeholders to raise and deploy capital into the housing sector.
According to him, there is an evident pressure on available housing which had led to rural-urban migration and triggered a severe housing deficit of at least 28 million housing units in Nigeria.
He, however, stated that solving this challenge would entail creating linkages between the provision of land to property developers, through increased availability of housing finance, to a reduction in property transaction costs.
Onyema disclosed that a proposed launch of an ‘Impact Board’ by the Nigerian Exchange Limited (NGX) which would serve as a platform for listing of social bonds that are expected to propel capital raising to meet the needs integral to the housing sector, whilst helping Nigeria meet its SDG commitments was underway.
Furthermore, he also noted that two of its subsidiaries have also contributed to improving the housing sector in Nigeria.
Onyema said NGX Real Estate Limited is focused on developing innovative solutions to the housing gap in Nigeria and with an equity market capitalisation of N28 trillion for the exchange, the capital market provides an active platform for major players in the housing value chain.
“Today, the NGX Exchange has listed companies in the housing value chain including real estate development, construction, mortgage banking, household durables manufacturing, building materials, and financial services which have raised equity capital over the years to finance their activities.”
On the fixed income side, Onyema stated that the NGX has a market capitalisation of about N23 trillion with a significant portion of this capital deployed to the infrastructure and housing sectors.
Onyema added that Pension Fund Administrators (PFAs) have a part to play in addressing the challenges in the housing sector given their over N13 trillion in Assets Under Management.
“The PFAs can increase their exposure to the housing value chain by allocating more resources to this sector in the form of equities, bonds, REITs and others according to PENCOM investment guidelines”, he said.