Federal Mortgage Bank refunds N12bn wrongful deductions

The Federal Mortgage Bank of Nigeria has refunded N12bn out of the outstanding N19bn wrongful deductions of the National Housing Fund contributors.

The deductions were misconstrued as revenue under the 40 per cent deduction regime of revenue accruing to federal agencies.

The Managing Director/Chief Executive, of FMBN, Mr. Shehu Osidi, disclosed this at the FMBN Day at the 18th Africa International Housing Show 2024 held in Abuja on Wednesday.

The Federal Government, in 2023, commenced the implementation of an automatic 40 per cent deduction of Internally Generated Revenues of federal universities and other partially funded institutions across the country.

The auto-deduction policy of gross IGR is in line with the finance circular with reference number FMFBNP/OTHERS/IGR/CRF/12/2021 dated December 20, 2021.

It, however, in a circular, limited the annual budgetary expenditure from IGR of the partially funded federal agencies.

Osidi stated, “We initiated constructive engagement with the Federal Ministry of Finance to secure refunds of the wrongful deductions of NHF contribution misconstrued as revenue under the 40 per cent deduction regime of the revenue accruing to the Federal Agencies which led to the recovery of N12bn out of the outstanding N19bn into the Bank’s coffers.”

He added that the bank was engaging relevant authorities until the deduction LS is stopped and “we recover outstanding balances trapped by NHF funds.”

Osidi disclosed that the new management of the bank, through the Ministry of Finance, has presented the proposal for the recapitalisation of FMBN at the Federal Executive Council.

“This effort has led to the establishment of an inter-agency committee on the recapitalization of the Bank towards improving its capacity for providing adequate liquidity for the Nigeria Housing Finance sector and affordable housing delivery in Nigeria,” he said.

He noted that the recapitalisation committee included the Federal Ministry of Finance, Bureau of Public Enterprises, Ministry of Finance Incorporated and the Federal Ministry of Housing and Urban Development.

According to the Governor of the Central Bank of Nigeria, Olayemi Cardoso, the apex bank commenced the process of banks recapitalisation in November 2023 however, in March 2024, it issued a circular to the banks and directed commercial banks with international authorisation to increase their capital base to N500bn and national banks to N200bn.

Commercial banks with national licences must meet an N200bn threshold, while those with regional authorisation are expected to achieve an N50bn capital floor by 2026.