BY ISAAC MEGBOLUGBE
AUGUST 18, 2024
The Elusive Promised Land: A Dream Deferred For over twenty years, I embarked on a relentless journey to revolutionize Nigeria’s economy through the power of mortgage and capital markets. Like the Israelites wandering in the wilderness, I faced numerous challenges, setbacks, and disappointments.
Despite my tireless efforts, dedication, and expertise, my vision for a transformed economy remained elusive.I provided free lectures, conducted workshops, and delivered keynote addresses to industry professionals. I wrote proposals and business plans, seeking to perfect the market and facilitate efficiency, growth, and competitiveness.
However, my endeavors were met with resistance, skepticism, and even exploitation. Many sought shortcuts or personal gains, rather than embracing the transformative power of a well-structured market. A poignant moment came when a business leader expressed admiration for my commitment but confessed that Nigerian business owners prioritize personal wealth over. economic transformation. This realization was a turning point, as I began to understand the entrenched mentality that hindered my efforts.
My initiatives were often repurposed for personal gain, and the global financial crisis of 2007-2008 ultimately led to the loss of my personal investment funds. Unlike Moses and the Israelites, I never reached the Promised Land. Instead, Nigeria remains a wilderness to me – a land of untapped resources, abandoned potentials, and manufactured prosperity.Today, I remain in the diaspora, longing for a promised land that seems forever denied. My story serves as a testament to the challenges of driving change in a complex and often unforgiving environment.
Though my walk in the wilderness was unrequited, I hold onto the hope that one day, Nigeria will realize its full potential and become a land of prosperity and growth for all.A Dream Deferred or an Illusion Shattered Despite the setbacks and disappointments, I remain steadfast in my belief that Nigeria can be transformed.
The country is rich in resources, talent, and potential. However, it requires a fundamental shift in mindset and a commitment to collective progress over personal gain. As I reflect on my wilderness years, I am reminded of the importance of perseverance and resilience.
The journey was long and arduous, but it taught me valuable lessons about the complexities of driving change in a challenging environment.To those who share my vision for a transformed Nigeria, I urge you to remaincommitted to the cause. Let us continue to push for progress, even in the face of adversity. Let us work together to create a Nigeria where economic growth is inclusive, sustainable, and beneficial to all. In conclusion, my unrequited walk in the wilderness has been a journey of discovery, growth, and resilience.
Though I may not have reached the Promised Land, I remainhopeful that future generations will inherit a Nigeria that is transformed, prosperous, and just. The wilderness may be long and unforgiving, but with determination and collective effort, we can create a brighter future for ourselves and for generations to come.
As I look back on my journey, I am reminded of the words of Nelson Mandela, who said, “The greatest glory in living lies not in never falling, but in rising every time we fall.”
My wilderness years were marked by numerous falls, but I rose each time, driven by my passion for a transformed Nigeria. To those who are currently navigating their own wilderness, I offer these words of encouragement: do not lose faith, do not lose hope, and do not lose sight of your vision.
The journey may be long and arduous, but the destination is worth it. In the end, my unrequited walk in the wilderness has taught me that true success is not measured by achievements or accolades, but by the impact we have on others and the difference we make in the world. Though I may not have transformed Nigeria’s economy, I hope that my story will inspire others to take up the mantle and continue the fight for a better future.
As I close this chapter of my life, I am reminded of the words of Robert Frost, who said, “Two roads diverged in a wood, and I—I took the one less traveled by, and that has made all the difference.” My wilderness years may not have led me to the Promised Land, but they have made me who I am today, and for that, I am eternally grateful. In the end, it is not the destination that matters, but the journey itself. And though my journey may not have been easy, it has been worth it.
For in the words of Maya Angelou, “Do the best you can until you know better. Then, when you know better, do better.” I have done my best, and I will continue to do better, even in the face of adversity.The Future of My Dream: As I move forward, I carry with me the lessons of the wilderness. I know that transformation is a continuous process, and that progress is often incremental. I remain committed to being a force for good, and to inspiring others to join me on this journey. To Nigeria, I say: your wilderness years will come to an end. Your Promised Land awaits. It will take time, effort, and perseverance, but it will come. And when it does, may we look back on these years with pride, knowing that we played a part in shaping a brighter future.
In closing, I leave you with the words of Martin Luther King Jr., who said, “The arc of the moral universe is long, but it bends towards justice.” May our collective efforts bend the arc towards a more just, equitable, and prosperous Nigeria. And so, I bid farewell to my wilderness years, and hello to a new chapter of hope, resilience, and determination. May we walk together towards a brighter future, and may our journey be guided by the principles of justice, equality, and compassion.Savoring the Past to Flavor the Future.
SAVORING THE PAST TO FLAVOR THE FUTURE
LATE CHIEF OBAFEMI AWOLOWO
The Late Chief Obafemi Awolowo, a visionary leader and statesman, prophesied that Nigeria would enter a period of darkness that could last for approximately 50 years. He forewarned that Nigerians would only have a distant memory of the country’s former glory. Awolowo shared this prophecy on two occasions: first in 1963, after his
conviction for treasonable felony, and again in 1979, following the rigged elections that led to President Shehu
Shagari’s victory.
Here was a Man that appeared in the World, lived and died at a time far before the world would be ready to comprehend and accommodate him. He devoted his time to writing and documenting and shared his thoughts and ideas with posterity. A new generation of Nigerians are rediscovering his thoughts and ideas especially people in the diaspora. I am in my 70s, On one hand, I am sad to be relegating myself to the past needful to be savored so we can flavor the future for posterity. In this sense, I find
tremendous inspiration from how the like of Chief Obafemi Awolowo and Professor Emeritus Akin Mabogunje codified their thoughts, ideas, decisions, actions and experiences for the benefit of future generation.Awolowo’s prophecy was a testament to his
foresight and understanding of Nigeria’s complex political landscape. He was a man ahead of his time, whose ideas
and thoughts were not fully appreciated during his lifetime. However, his legacy lives on, and a new generation of
Nigerians, particularly those in the
diaspora, are rediscovering his wisdom.
As someone in their 70s, on the other hand, I am humbled by the realization that I am part of a passing
generation. I find solace in the fact that Awolowo and other visionary leaders like Professor Emeritus Akin Mabogunje have left behind a wealth of knowledge and experiences for future generations to learn from.
Considering that 1979 was 45 years ago, it’s possible that Nigeria may soon emerge from the darkness and return
to a brighter era within the next decade. This gives me hope that my aspirations for a better Nigeria may not be entirely unfounded. The prophecies and ideas of Awolowo and other leaders serve as a guiding light, inspiring us to work towards a brighter future for posterity.
Awolowo’s prophecy serves as a reminder that Nigeria’s current challenges are not insurmountable. His words encourage us to reflect on our past, learn from our mistakes, and work towards a better future. As we navigate the complexities of nation-building, we would do well to draw inspiration from Awolowo’s vision, wisdom, and leadership.
The fact that a new generation of Nigerians is rediscovering Awolowo’s ideas and legacy is a testament to the power of his vision. His commitment to democracy, social justice, and economic development continues to resonate with Nigerians at home and abroad. As we look to the future, we must embrace the lessons of the past and build on the foundations laid by leaders like Awolowo. By doing so, we can create a brighter future for Nigeria and ensure that the country realizes its full potential.
In conclusion, Awolowo’s prophecy reminds us that Nigeria’s journey is not without its challenges, but with determination, resilience, and a commitment to our shared values, we can overcome them. Let us continue to
draw inspiration from his legacy and work towards a brighter future for all Nigerians.
.Understanding the Nigerian Mortgage Opportunity
1.1. Scope
The successful consolidation of the Nigerian Banking
industry and the bold proposals enunciated in the
Financial Systems Strategy 2020 (FSS2020) to propel
Nigeria among the 10 largest economies in the world has
emboldened the Government to restructure the fledgling
mortgage banking industry in Nigeria. This Operating Plan
sets out a strategy for achieving the government’s vision
to develop a mortgage finance system for Nigeria The plan is to
formulate a project with a broad enough
scope for design, development and implementation of
end-to-end business architecture for an integrated
modern finance system capable of connecting the
Nigerian housing sector to global capital markets.
1.2 Assessment of the Current Landscape
The formal Nigerian financial system exists in parallel
with an extremely vibrant informal sector, where most of
the population transacts its day-to-day business. 97% of
the Nigerian population is unbanked, and does not have
a relationship with a “formal” financial institution. For
this reason, the “informal sector” scheme is most
commonly used. This section, which provides an
overview of the financial system, will deal exclusively
with the formal market. The formal Nigerian financial
system is comprised of the Central Bank of Nigeria (CBN)
and 25 deposit money banks, which together constitute
the monetary system; and, other financial institutions
including 747 community banks. 6 development finance
institutions, 98 finance companies, 188 insurance
companies and 80 bureaux de change. (CBN Annual Report, Dec.
2001, p.27 )
The current description of world trends in housing
finance detailed below is a conceptual one. The reality in
housing finance, as well as in other areas of housing
policy, such as the financing of social housing, is that
there are profound differences among the 180 developed
and developing countries that are now members of the
World Bank. In housing finance, one can distinguish six
major groups of housing finance systems. Within each of
these groups, considerable differences remain and
sharply different opportunities for improving housing
finance may exist.
1.3 Rationale and Need for Mortgage Market Development in
Nigeria The establishment of a secondary mortgage market
institution in Nigeria could help provide liquidity for
Nigeria’s fledgling residential mortgage business and
produce overall growth and stability for the housing
finance and capital markets in the long term. Depending
on the design of the institution and the readiness of the
capital markets, secondary market development has the
potential to produce many benefits for the housing
finance system in Nigeria. In particular, a secondary
market institution may:
• Increase liquidity for mortgage lenders − Regardless
of whether or not Nigeria’s capital markets are ready
for securitization, the proposed secondary market
institution can access international capital markets to
fund mortgage purchases from mortgage lenders.
Purchasing mortgages off the books of lenders will
ease capital constraints and tight liquidity problems.
• Increase funds for borrowers − Selling mortgages to
a secondary financial intermediary like the proposed
secondary market institution will increase the funds
available for primary mortgage lending. Since lenders
will be able to sell their mortgages to the institution,
they will have more capital to lend to borrowers.
• Create links between mortgage originators and
capital markets − Secondary market institutions
serve as an important link between the primary
mortgage market and the greater capital markets.
These institutions could help make mortgage
products more attractive to capital market investors
by absorbing the default risk of the assets through
mortgage insurance and guarantees and
standardizing the inherent prepayment options of
mortgage instruments. As a separate institution,
secondary mortgage conduits are able to specialize in
such activities and achieve greater cost advantages
than if the same activities are conducted by
originators.
• Premium standardization in the operations of
primary lenders and in mortgage products −
Transferring the risk of mortgage assets to a
secondary mortgage institution and to the greater
capital markets requires that these risks be more
accurately measured. Tremendous information asymmetry exists between mortgagors, who know in
detail the specifics of their personal financial
institution, and investors, who are forced to rely on
market information provided by underwriters.
Standardization of the information collected by
underwriters, and in the underwriting process itself,
helps investors see patterns in default behaviors
across all mortgage loans, equalizing this asymmetry.
In addition, securitization of mortgage assets requires
greater standardization of mortgage products. In
order to pool mortgages, mortgage assets must have
similar characteristics, loan terms, and interest rates.
• Promote the development of a support network of
institutions − Development of a secondary mortgage
market requires a network of support institutions.
These institutions include general insurance
companies that provide title insurance, credit
bureaus, credit rating agencies or others to
independently assess the credit and prepayment risks
associated with securities, and institutions to provide
effective national or private mortgage insurance.
• Provide market leadership − A secondary mortgage
institution could play a leadership role by innovating
products and coordinating industry-wide efforts to
develop or strengthen the regulatory, legal, and
institutional framework required for effective
operation of a secondary mortgage market and
deepening of the capital markets.
Isaac Megbolugbe, PhD, FRICS, Former Vice President at
Fannie Mae, Former Practice Leader at
PricewaterhouseCoopers, Retired Professor at Carey Business
School, Johns Hopkins University, Senior Advisor and
Managing Principal at GIVA International and Development
Integrated Analytics, and Fellow at Royal Institution of
Chartered Surveyors is resident in the United States of America
