John Terhemen Ikyaave

The FMBN board and management retreat in Abuja three months after President Muhammadu Buhari appointed a new team of professionals to lead Nigeria’s apex mortgage institution was timely and strategic.

It was a logical next step after the new management’s exhaustive internal study, clear understanding of systemic issues, and the need to engage a broader spectrum of stakeholders to help sharpen the reform measures necessary to take FMBN to the next level.

The retreat titled, “Strategy Repositioning for Optimised Performance,” took place at Transcorp Hilton, Abuja, from 1st to 2nd August, 2022, and had a wide array of participants in attendance. This included the Minister of Works and Housing, His Excellency Babatunde Raji Fashola, who supervises the FMBN, the FMBN Board, the Executive Management Team, and senior FMBN Management staff.

The event also had in attendance Chairman/CEO, Nigerians in Diaspora Commission (NIDCOM), Hon. (Dr) Abike Dabiri-Erewa, Director (OFID, CBN), President/Chairman of Council of the Mortgage Banking Association of Nigeria (MBAN), Mr. Richard Olubameru, President, Real Estate Developers Association of Nigeria (REDAN), Aliyu Wammako and Mr. Olukayode Pitan, the MD/CE, Bank of Industry amongst others.

At the heart of deliberations at the FMBN Board and Management Retreat was the need to exhaustively review and update the FMBN Strategy Plan (2020 – 2024) to reflect current realities.

Also to change is the implementation timeframe of the Strategy Plan. FMBN had worked with Messrs. KPMG Ltd to articulate the Strategy Plan, and the Board of Directors approved it in May 2020 for implementation.

The FMBN Strategy Plan set transformational goals, institutional aspirations and laid out a systematic approach to achieving them. It aims to deepen mortgage penetration, facilitate access to homeownership, and enhance customer experience through robust customer engagement practices. It also sought to ensure operational excellence, transform organisational culture, and diversify the FMBN funding mix beyond workers’ contributions of 2.5 per cent monthly salaries to the National Housing Fund (NHF) Scheme.

It is now over three years into the plan’s implementation, and the macro-environment and many other factors have changed. June 2022 marked 40 per cent of the original timeline of the Strategy Plan’s years 2020 – 2024. FMBN management reported at the retreat that the bank had successfully executed 38 per cent of its strategic initiatives while 26 per cent are ongoing.

According to the Managing Director/Chief Executive of FMBN, Madu Hamman, the 2022 board and management retreat aimed to, “re-calibrate and enhance the Bank’s Strategy Blueprint and create a pathway to chart its immediate, short- and medium-term future.”

“Since the approval of FMBN’s 5-Year Strategy Blueprint by the immediate past Board of the Bank in 2020, the operating environment has witnessed several significant challenges. These include the outbreak of the COVID-19 global pandemic, the Russia-Saudi Arabia oil price war, and, more recently, the Russia-Ukraine conflict, all with their adverse macroeconomic and social-economic fallouts in international and national spheres.

“Closer home, over the past couple of years, the country has witnessed high inflationary trends driven by energy and food prices, local currency value devaluation, incidences of insecurity, and an uptick in political activities leading up to the general elections in 2023. These have all had a significant impact on the operational and financial performances of the Bank and its ability to execute the strategic direction as planned.

“Equally important is the fact that earlier this year, Mr. President graciously appointed a new Board of Directors for the Federal Mortgage Bank of Nigeria under the very able and competent leadership of Mr. Ayodeji Gbeleyi, the Board Chairman, with a strict mandate to take the institution to ‘the next level” noted Madu in his remarks.

The FMBN MD/CE explained that “two important factors drive the need to re-calibrate and re-focus the strategic direction for the Bank. The first is the need to re-align its strategic targets in light of prevailing economic, financial, and social realities shaped by the shocks of global pandemics and conflicts. The second is to re-configure the strategy document to incorporate the vision and focus of the Bank’s new leadership in implementing Mr. President’s mandate for affordable housing delivery to Nigerians, especially those in the low-and medium-income brackets.”

Madu added, “our collective vision for an FMBN of the future is a financially viable and highly adaptive Bank. One that is capable of adequately coping with the vagaries of a world transiting from a volatile, uncertain, complex, and ambiguous (VUCA) environment to a brittle, anxious, non-linear, and incomprehensible (BANI) environment as a result of the COVID-19 pandemic and other emerged and unfolding factors. To this end, the Bank’s strategy document must become the tool for managing a constantly shifting environment and identifying and utilising opportunities that such challenges may present, nonetheless.”

Key targets of the FMBN Strategy Blueprint that were the object of review at the retreat included to accelerate the growth of NHF contributions from annual collections of N48.8 billion in 2019 to N284.7 billion by 2024; increase NHF contributors from five million as of 2019 to 31.6 million by 2024 and transform the mixture of formal/ informal sector contributions from 80:20 to 50:50 by 2024, and finance 100,000 housing units over the five years, with at least 10% of these from commercial transactions.

New Corporate Statements for a Business-Driven FMBN

The retreat also witnessed the launch of FMBN’s Corporate Statements in line with the new Board and Executive Management’s efforts to reposition the Bank as an institution that is able and willing to live up to its name as the foremost development finance organisation in Nigeria.

The statements include FMBN’s vision, “To be the preferred mortgage institution providing reliable and affordable access to homeownership for Nigerians,” and its Mission “To drive the delivery of accessible and affordable homeownership by providing sustainable liquidity, innovative products and services, and excellent customer service.” Also included are the Bank’s Core Values of Integrity, Professionalism, Accountability, Customer Centricity, and Teamwork (IPACT).

Fashola, unveiled the statements, a move the FMBN MD/CE described as symbolising “the formal beginning of the new future of the Federal Mortgage Bank of Nigeria (FMBN).”

“In 2020, FMBN enthusiastically adopted Corporate Statements as part of the 5-Year Strategy Blueprint giving life to this aspiration as part of its strategy formulation. From now on, it is the intention of the Bank that these declarations and values will serve as our guiding light as we forge ahead in charting a better and brighter future for the Bank,” Madu added.

Commitment to FMBN as a Dynamic Mortgage Banking Institution

In robust remarks at the event, the FMBN Board Chairman, Ayodeji Ariyo Gbeleyi said the retreat underscored, “the irrevocable commitment of the Board to provide the required leadership and strategic direction for a rapid and sustainable positive turn-around in all facets of the Bank’s operations.”

He affirmed that the present Board and Management are poised to improve on the previous efforts to reposition the Bank for greater efficiency and operational excellence.

“In the past few months since the assumption of our respective roles, the Board and Management have observed the Bank’s financial position with keen interest. We have also noted the layers of processes and work streams in the Bank, the level of Non-Performing Loans (NPLs), the credit administration structure within the Bank, the monitoring of projects, team collaboration, and focus on the big picture.

“Particularly, the regulatory recommendations of the Central Bank of Nigeria following its last examination of the Bank between January 2020 and June 2021 in the areas of Inadequate Capitalization, Non-Performing Loans, Computerisation, Business Process Review, Cultural Transformation, etc., to mention but a few.

“Therefore, it is the unwavering intention of the current Board and Executive Management to reposition the Bank as an agile institution to enable it to function effectively as the country’s apex wholesale secondary mortgage provider within the confines of the law. This is its core mandate, and we shall be faithful in steering the Bank towards that desired destination,” Gbeleyi added.

Furthermore, Fashola in his address charged the board and management team to live up to the urgent necessity to reposition the Bank and ensure improved performance.

“If there are words which capture the necessity and the reality that beckons for the Federal Mortgage Bank of Nigeria, those words are best represented by Repositioning and Performance. They underly the rationale for setting up the Bank many years ago: to provide service to Nigerians.

“Since the inception of the Muhammadu Buhari administration in 2015, the Bank has a positive story of service delivery to tell in the number of mortgages issued, housing schemes funded and completed, and changes in eligibility conditions to improve access to funding, to mention a few. But this positive story is only a small part of what is possible if the Bank imagines and reinvents itself,” he added.

The minister added that as the promoter of the Bank, the federal government had infused the board and management with a sense of how it should be repositioned by constituting a more representative board. One that reflects national diversity of gender, religion, and ethnicity while increasing the number of banking professionals in the management and board.

“The intention is to ensure optimum service to the real owners of the Bank – The Nigerian public and the National Housing Fund (NHF) contributors. This is the repositioning the government envisions and welcomes, one that emphasizes the banking identity of the institution. After all, it is called a bank. It collects people’s money and gives out loans; therefore, it must be a bank and is expected to act like one,” Fashola added.

The minister charged the Board to be more innovative in developing products that speak to Nigerians’ unique needs, including rental housing products.

“I know that the Bank is issuing mortgages and Home Refurbishment Loans and has started a Rent-to-Own initiative. But is that all that the Bank can do? What can the Bank do for contributors who need to pay 2 to 3 years rent in advance for monthly salary received in Arrears?” he added.

Overall, the Minister of Works expressed commitment to a better and more impactful FMBN; the clarity of vision enunciated by the Board and Executive Management, as well as the insightful presentations and exchange of ideas at the 2022 FMBN Retreat, provides much ground for optimism. A reformed FMBN, modern and dynamic FMBN, will sharpen the government’s efforts to cater to the Nigerians’ housing needs and sustainably tackle the housing deficit.

Ikyaave is a housing policy analyst based in Abuja