IMPACT OF CORRUPTION ON MORTGAGE DEVELOPMENT IN NIGERIA
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IMPACT OF CORRUPTION ON MORTGAGE DEVELOPMENT IN NIGERIA
CHAPITRE ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Recent public debates in Nigeria have focused on the rising rate of corruption as a result of ineffective public finance planning and implementation, particularly in some developing countries, including Nigeria, which reduces growth in all sectors of the economy, including mortgage development.
Corruption became obvious when the government institution was established as a result of the actions of those appointed or elected to run government institutions (Anyanwu, 2002; Idomeh, 2006). Corruption has recently emerged as a big issue in foreign aid and in Nigeria as a whole.
Corruption is an ancient practise that may be traced back to pre-biblical times and has been documented in both developed and developing countries’ ancient civilizations. Political and societal corruption is not a new phenomena in Nigerian society. Corruption is a social issue that has piqued the interest of many academics.
According to Ruzindana (1999), corruption in Africa is an issue caused by public officials and the parties with whom they engage routinely deviating from acceptable standards and norms.
Over the last five decades, the primary concern of international aid policy has been to improve the living conditions of the poor in the world’s poorest countries by delivering affordable housing building programmes.
Many people have labelled Nigeria as a country that lacks policy formulation but excels at policy implementation. When a perceived need is identified, governments respond by forming a committee to investigate the matter. The committee convenes, formulates, and submits a policy to the government, which grants its approval.
This tradition is not unique to mortgage and housing policy, but it has contributed significantly to the failure of the country’s housing projects. Despite the development of great ideas capable of revamping the country’s housing schemes, there has been no major improvement in the supply of affordable housing in Nigeria.
There was the 1991 National Housing Policy, which included a slew of policies and activities aimed at improving the lives of ordinary Nigerians in terms of home ownership. By the year 2000,
the programme was expected to ensure that the typical Nigerian had access to excellent housing and accommodation at an affordable cost through the provision of long-term loans at an interest rate of no more than 4% per annum.
There was also the 2006 National Housing Policy, which went above and beyond by partially disengaging the government from housing programmes and incorporating private investors and real estate developers into national housing programmes. However, by the end of the day, it all appeared to be a vicious circle, as those policies were only good as documents and not in implementation (Anyanwu, 2012).
The Nigeria Building Society is credited with establishing mortgage banking in Nigeria in 1956. According to Oduwaye (2014), the society imploded in the early 1970s as a result of its incapacity to carry out its statutory obligations. As a result, the government invested N20 million and changed the name to Federal Mortgage Bank of Nigeria (FMBN).
The FMBN got off in 1977, with a N20 million start-up capital from the federal government. The FMBN was unable to fulfil the increased demand. According to statistics, in 1970, outstanding applications were N223.8 million, while available funds totaled N127.0 million, indicating a demand-supply ratio of 2:1.
When the outstanding application reached N465.8 million and only N105.3 million was available, the ratio deteriorated to 4:1. The bank has never been able to meet demand. The FMBN’s failure over the years, along with a significant housing crisis, resulted in the 1991 National Housing Policy.
As can be seen from the foregoing, because the government was never able to solve each of the problems at their various stages, they continued to deteriorate, culminating in the current scenario of a 17 million housing shortfall,
which now appears insurmountable. The researcher, on the other hand, is looking into the impact of corruption on mortgage and housing growth in Nigeria.
According to experts, successive administrations have never taken these measures seriously and have never budgeted adequately for mortgage financing with a human face. According to Audu (2014),
mortgage policy implementation is particularly bad since the housing issue is highly capital intensive, and the government, both state and federal, does not allocate an adequate budget for housing.
1.2 STATEMENT OF THE PROBLEM
Due to the level of corruption in the country and its effect on the growth of every sector, the necessity to research corruption, particularly in mortgage development in Nigeria, has continued to draw heated commentary and academic interest.
Corruption is one of the causes of numerous unresolved problems in Nigeria, which have severely hampered and reduced housing construction (Ayobolu, 2006).
According to the International Centre for Economic Growth (1999), corruption is a canker worm that has eaten deep into the fabric of a nation, ranging from minor corruption to political or systematic corruption.
Corruption has hampered mortgage development by preventing policies from being implemented and diverting funding, among other things. The researcher is looking into how corruption affects mortgage development in Nigeria.
1.3 OBJECTIVES OF THE STUDY
The following are the study’s objectives:
1. To investigate the influence of corruption on Nigerian mortgage development.
2. To assess the current situation of real estate and mortgage development in Nigeria.
3. Identifying measures to eliminate corruption in order to boost mortgage development in Nigeria.
1.4 RESEARCH QUESTIONS
1. What effect does corruption have on mortgage development in Nigeria?
2. What is the situation of Nigeria’s real estate and mortgage development?
3. What are the methods for combating corruption in order to boost mortgage development in Nigeria?
1.5 HYPOTHESIS
HO: Corruption has little effect on mortgage development in Nigeria.
Corruption has an impact on mortgage development in Nigeria, according to HA.
1.6 SIGNIFICANCE OF THE STUDY
The following are the study’s implications:
1. The study’s findings will educate the government, policymakers, and law enforcement officials on how to prevent corruption in order to promote mortgage development in Nigeria through effective policy formation and execution.
2. This research will also serve as a resource base for other academics and researchers interested in conducting additional research in this sector in the future, and if implemented, will go so far as to provide new explanations for the topic.
1.7 SCOPE AND LIMITATIONS OF THE STUDY
This study on the impact of corruption on mortgage development in Nigeria will examine all mortgage policies developed to improve housing development in Nigeria in comparison to the current level of housing development in Nigeria. It would also address corruption issues in Nigerian home building.
STUDY LIMITATIONS
Financial constraint- A lack of funds tends to restrict the researcher’s efficiency in locating relevant materials, literature, or information, as well as in the data collection procedure (internet, questionnaire, and interview).
Time constraint- The researcher will conduct this investigation alongside other academic activities. As a result, the amount of time spent on research will be reduced.
1.8 DEFINITION OF TERMS
A mortgage is a legal agreement in which a bank, building society or other financial institution lends money at interest in exchange for obtaining title to the debtor’s property, with the proviso that the conveyance of title becomes void upon discharge of the obligation.
Corruption is defined as dishonest or fraudulent behaviour by persons in positions of power, generally involving bribery.
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