Men and officers of the Nigeria Police are at cross purposes over the Inspector- General of Police’s “forced deductions” of N11, 000 from their salaries in June and July, 2003. The rank and file are particularly displeased because they claimed not to have been informed about these prior to the action. But the leadership of the Force has explained that the deductions are a Retirement Plan that guarantees a roof over every officer’s head, both now and in the future. Head, Special Investigations, Isioma Madike, in this report looks at both sides of the argument and the management of similar mortgages in the past
“I received a text message from my bank notifying me that my salary had been paid. However, I found out that N5, 000 had been deducted. It was a few days later that we were given forms and we were then told that we had to buy shares compulsorily. How could the deductions have been made before I even filled the form? The police authorities are leveraging on the fact that policemen cannot openly protest. The Inspector- General of Police, Mohammed Abubakar, must look into this.” This was the plea of a police inspector, who spoke to Sunday Mirror on condition of anonymity on the “forced deductions” of N11, 000 from their salaries in June and July, 2003, meant for a mortgage scheme.
He was not alone as the deduction is already generating acrimony among officers and men of the Force. For instance, corporal Samson of Lagos State Police Command, Oduduwa, Ikeja, said that the scheme was not well planned. He argued that some of them close to retirement age should have been left out. “I have been a policeman for 34 years and I am close to retirement. People like me should have been left out from this scheme, more so that I am already a member of the Nigeria Police Cooperative Multipurpose Society,” he added. However, these might not be the only deductions made from police salaries.
Another police corporal from Area ‘G’ command, Ogba, also in Lagos said, “N2, 000 was deducted from the salaries of senior police officers while N1, 000 was deducted from the rank and file as compulsory contribution towards the World Police and Fire Games in which Nigerian policemen will participate. “Why can’t the Federal Government pay from its own purse?” he queried. Yet, a senior police officer said the scheme was initiated in order to encourage policemen to save because a large number of them had the habit of spending frivolously.
The many complaints of the officers were that the Mechanised Salary Section was “dubious” because they were not informed about the deductions prior to the action. They added that it was arbitrary for the authorities to have done so. A low ranking officer complained that his salary was too meager to support him after an automatic withdrawal of the compulsory share purchase fee of N5, 500. He is of the opinion that the scheme should have been on an optional basis, instead of imposing it on everyone.
But Abubakar has explained that the deduction is to facilitate the floating of a mortgage bank for the police, which will greatly improve the housing needs of everybody in the police personnel. He said that the bank would be in every state, since the police personnel are widespread in the country. Abubakar, who spoke through the Force Public Relations Officer, Frank Mba, a Chief Superintendent of police, said that the N5, 500 deductions from the salary of all police personnel was for the benefit of the officers and men. He said the floating of the police mortgage bank became necessary after police personnel had been disappointed and frustrated by National Housing Fund in terms of access to loans for rent, buy or build a house. “The N5, 500 deductions, which was for only two months, will make every policeman a shareholder in the bank, thus entitled to a share certificate, loans and dividends. The loan is expected to assist any policeman to have a home of his own,” he said.
He did not stop there but said, “Loans from the Federal Mortgage Bank can only be accessed through established Mortgage Banks otherwise called Primary Mortgage Institutions (PMIs). The Nigeria Police Force subscribed to the National Housing Fund (NHF) during the administration of IGP, Ibrahim Coomassie, in 1994 with deduction of NHF contributions from officers and remittance of same to the FMBN. This led to the establishment of the NHF Desk within the Force to harmonise and reconcile deductions and remittances. The Nigeria Police Force remains the highest contributor to the Federal Mortgage Bank. As at date, contributions by Police officers to the NHF and remittances to the FMBN total approximately N8billion. Unfortunately, the Nigeria Police Force has not benefited from the facilities available at the FMBN under the NHF Act while other agencies and corporate groups benefit from huge contributions of policemen.
‘Deductions generating acrimony among officers’
“Why? Because the Nigeria Police Force could not float a Mortgage Bank to easily access the required loans for its officers and men. Efforts of the Nigeria Police Force over the years to establish a Mortgage Bank had been stalled by administrative instabilities generally occasioned by frequent leadership changes. Apart from other technicalities and statutory requirements by the Central Bank of Nigeria (CBN) and other regulatory agencies, the capitalisation sum of N2.5 billion for one state branch or N5 billion for a National Branch is required before a Mortgage Bank can be licensed. Considering the interests of the police in accessing its huge contributions to the NHF, an entirely owned Mortgage Bank is needed to maximally protect the long-term housing initiative for generations of officers and men and even retirees,” he further said.
Yet, the officers are alleging that since Abubakar assumed office, he had cultivated the habit of deducting from their salary. They said the first time was when he deducted N1, 000 from all policemen’s salary, for the Police Games in Port Harcourt. Few days after the recent deduction, they were issued the ‘Fokas forms’ by their superior officers, which were for the procurement of Fokas Savings and Loans Limited shares.
For the policeman, the dream to own a house or an apartment has always been there. In most cases they die without fulfilling that dream. It would simply be stating the obvious to say that the living conditions of the police in the barracks are at best deplorable. Years of alleged mismanagement and paucity of funds further deteriorated several barracks across the country, therefore making life unbearable for the personnel of the Force. Perhaps, this may have informed the IGP’s decision to start thinking of how his officers who would one day retire are provided with affordable housing of their own. In fulfillment of that dream, a police mortgage bank called the Nigeria Police Savings and Loans Limited (Mortgage Bankers) presently known as FOKAS Savings and Loans Limited was floated.
It is designed as the veritable vehicle that would deliver homes as part of the retirement plan that guarantees a roof over every officer’s head, both now and in the future to all police officers. This initiative, according to police authorities, would cater for all personnel of the Force irrespective of rank. Accordingly, it has been packaged to give priority attention to members of the rank and file who are considered more vulnerable in terms of housing needs.
As part of such plans, the police boss recently inaugurated 200 units of three-bedroom flats constructed for officers and men of the police Force in Idimu in Lagos State. The housing estate was named after President Goodluck Jonathan. Similar initiative, according to Abubakar, would be replicated in other parts of the country. But while the housing estate unveiled by the President in Lagos was built through a Public Private Partnership (PPP) arrangement spearheaded by the Federal Government, the new housing units being planned by the police authorities, according to the IG, would be funded by the police mortgage bank at a more subsidised rate.
Mba said the initiative was in line with the Federal Government’s plan for every worker to own a home of his own and for which the NHF was established in 1993. According to him, every person employed in Nigeria contributes a percentage of his basic salary to the NHF, which entitles the worker to access a loan facility from the FMBN, the custodian of the nation’s housing fund. However, he said loans from the FMBN could only be accessed through established PMIs.
In spite of this, the police, Mba said, are yet to benefit from the facilities available at the FMBN under the NHF Act unlike other agencies and cooperate groups, which have been benefiting from the sweat of the force. He explained that the reason was partly because the police could not float a mortgage bank to easily access the required loans for its officers and men, and efforts over the years were stalled by administrative instabilities generally occasioned by frequent leadership changes. Besides other technicalities and statutory requirements by the CBN and other regulatory agencies, he said the capitalisation sum of N2.5billion for one state branch or N5billion for a national branch is required before a mortgage bank can be licensed.
He, however, said that despite this huge financial requirement, an entirely owned mortgage bank is needed by the Force to maximally protect the long-term housing initiative for the officers and men in future. To achieve this, the Force, according to him, would have to look at the options of either sourcing for the required fund and floating an entirely new mortgage bank or acquiring an existing bank and recapitalising it appropriately. He said that acquiring an existing PMI was the most cost-effective approach.
This, perhaps, may be why the Force went for FOKAS Savings and Loans Limited (Mortgage Bankers), which was an existing PMIs with equity shares of 270 million shares. But with technical guidance and following corpopurpose Society Ltd acquired 250 million shares from the total equity shares of the company. This amounted to 93 per cent of the FOKAS. The initiative thus guarantees a comfortable home for every officer of the NPF yielding results within the next one year and continuously after.
‘Contributors entitled to mortgage loan of N15m’
By this arrangement, every contributor to the NHF is entitled to a mortgage loan of N15million to build, purchase or renovates homes within a maximum repayment period of 30 years. It attracts a minimum interest of six per cent and maximum of eight per cent per annum throughout the loan tenure, which translates into affordable monthly loan servicing deductions for the beneficiary. He stressed that no additional collateral is required to obtain the loan as the home for which the loan is obtained serves as one. He said the minimal subscription of FOKAS shares for which N11, 000.00 is being deducted, is also across all ranks including the IGP, DIGs, AIGs and CPs down to the last Constable. This, according to him, makes every police officer a part owner of the PMB and will be issued share certificates for the minimal subscription as well as for additional subscriptions.
The IG has also said that the initiative, which is a perfect retirement settlement plan, would asides fulfilling the housing needs of officers, help combat corrupt tendencies within the Force and provides an enabling environment for efficiency and meritorious service. He clarified that the package requires individual officer’s minimal subscription for 10,000 ordinary shares of the FOKAS Savings and Loans limited (Mortgage Bankers), which is now the property of the Nigeria Police Cooperative Society. “The total cost of minimal subscription is put at N11,000 only, payable in two installments of N5, 500 each, at the rate of N1.10K per share and the process automatically guarantees part-ownership of the bank by every serving police officer. Subsequently, willing officers are at liberty to increase their subscriptions. Currently, subscription forms are on distribution across all commands and formations of the force to enable them appropriately regularise the minimal subscription already deducted and harmonise earlier subscriptions,” Abubakar said. He said that a committed task force has been constituted, in case of default, to ensure fast and early issuance of share certificates to all subscribing officers. He also said that payments of loans may be structured throughout the remaining part of an officer’s career with the Force and ev
en after retirement. “Even upon death or incapacitation, dependents of an officer would never lose their homes as the bank will accommodate convenient repayment plans by the deceased officer’s family. Contrary to fears, the benefits are numerous and being the highest contributors to the NHF, accumulated contributions of officers can easily be accessed to develop several hundreds of homes simultaneously at different locations, for officers and men of the Force. Retiring officers needing a refund of their total contributions to the NHF and who did not obtain any loans or benefit from the housing scheme can easily, through the PMB, recover such entitlements in line with the provisions of the NHF Act,” the IG said.
However, this is not the first time the Force is tinkering with this idea. During the time of former IGP, Mike Okiro, there was a similar initiative. At that time, Okiro, in a remark, had described the scheme as ‘’a major welfare package designed to help policemen own their houses.’’ He told enthusiastic policemen that the scheme was financed by primary mortgage institutions. He had also noted that shelter was a necessity of life, believing that an officer who lived in a conducive accommodation would tend to be more organised and composed. This, he said was in contrast to another who lives in a dirty, harsh and unfriendly environment. According to him, “such an officer is more likely to be hostile, intolerant and inhuman in the discharge of his duty.”
Okiro had expressed optimism that the scheme would ensure quality service delivery to the public. Dismissing fears that only personnel in the Police headquarters would benefit from the scheme, Ogbonna Onovo, then Deputy Inspector- General of Police, Administration and Finance, announced that land had been acquired in 16 states and the FCT for the scheme. He said that the parcels of land were acquired via arrangements between the commissioners of police and their respective state governors.
According to Onovo, the scheme had a target of 100,000 housing units. He said that some houses had earlier been completed while the N2.5 billion, which the Force owed FMBN through NHF had been cleared. Onovo said that 54 houses had been bought and donated by the Police Equipment Fund in Abuja to support the Force in its effort to provide decent accommodation.
A former Acting Managing Director of the FMBN, Moses Atagher, who also spoke at the launch, said the NHF was mobilised mainly from statutory long-term savings contributed by working Nigerians based on monthly deductions. The workers, he said, remitted 2.5 per cent of their incomes to the fund. According to Atagher, the NHF Act of 1992 allows individuals, including police personnel, who contribute to the fund, to access loan facility for the purpose of buying, building or renovating houses through any of its credit windows. “As at January 2008, the NHF had a total sum of N32.7 billion as cumulative contribution, out of which N3.7 billion was contributed by the police personnel,” he had said. Atagher said the FMBN was ‘’capable and willing’’ to provide necessary funding to developers and consultants of the scheme who met the bank’s conditions.
‘Previous initiative marred by fraud’
He said the bank would also facilitate the provision of mortgage facility to the benefiting officers and men of the Force to enable them to buy the houses. But some of the men of the Force nursed doubts about the success of the scheme. Some of them raised fears about the continuity of the programme after Okiro’s retirement. “The next police leadership may not make the housing issue a priority and that will affect the execution,’’ they had chorused. But the then Force Public Relations Officer, Agberibe Akpoebi, allayed such fears and expresses optimism that the project will always be a priority of the force. “The Police Housing Scheme is part of the seven-point agenda of the President Musa Yar’Adua’s administration and cannot be dropped suddenly,’’ he had promised. Akpoebi said the scheme was a noble one, which everybody should embrace. “No Inspector- General of Police will allow this good policy to die in his hands,’’ he declared.
In spite of such assurances, analysts still feared that the scheme may end up like former President Shehu Shagari’s police housing scheme that was abandoned after he left office. As government and the relevant institutions strive to actualise that housing scheme, commentators supported the programme by given the necessary support to make it a success. They argue that the country’s policemen and officers deserve decent accommodation while in service and after retirement.
But they were wrong as allegation of fraud marred the initiative shortly after Onovo left office as IGP. His successor in office, Hafiz Ringim, unmasked the scam that brought the Force into shame. He had ordered full investigation into an alleged fraudulent disbursement of N2billion loan meant for the Housing Scheme through the Special Investigation Unit (SIU) of the police at the Force Headquarters (FHQ), Abuja. Some members of the then House of Representatives were equally fingered in the alleged crime. The loan was said to have been acquired in 2009 from First Bank, Okigwe branch, Abia State
The Force was said to have been informed by petitions, first from a lawyer on behalf of 31 sub-contractors handling the construction of the housing units against a developer, Bailey Investment (Nig.) Limited in December 2010 and later First Bank Plc. The petitioners had claimed that Bailey had been paid N304 million “through Aso Savings and Loans by an arm of the Nigeria Police Force Housing Scheme and yet the sub-contractors were not paid.” They further claimed that they awarded some of the jobs to minor sub-contractors who built a total of 600 housing units at a total cost of N1.970, 802,446, adding that the money spent in building the structures was loan obtained from banks and friends at various interest rates. They also claimed that only N30 million was paid to them by Bailey.
In view of the advantages attached to the noble project, the Police Service Commission (PSC) gave its support for the loan, believing that it would eventually provide shelter for millions of policemen in the country. Okiro had reasoned that most officers would not be able to afford 10 per cent down payment as their gradual contribution to own a house that costs between N3million and N5million, hence the need for the loan. In the arrangement, the National Housing Fund was expected to pay 90 per cent of the cost of each house from contributions from police salaries.
To ensure that there was no default in payment of the loan, the then IGP was said to have opened an Escrow Account with the same First Bank, appointed three senior officers including Deputy Inspector-General of Police (DIG), Udom Ekpoudom, now retired, as signatories. Money deducted from salaries of officers, who obtained the loan, were due to be paid into the Escrow Account directly from the pay office. Also, he had instructed the former officer in charge of Housing Scheme to furnish First Bank with staff list of officers of the rank of Assistant Superintendent of Police (ASP) and above.
The decision of Okiro to release the staff list to First Bank was to forestall fraud, “because the loan was repayable within 24 months.” Sources in FHQ said, “It is believed that if an officer who has less than two years in service obtains the loan it would be difficult to retrieve, so the staff list was a guide for First Bank to screen prospective applicants and to ensure that only qualified officers benefited.”
Signal was sent to all police formations across the country, in pursuant of this, intimating them of the arrangement and for interested officers to obtain loan form from First Bank. As a result of this signal, First Bank allegedly disbursed about N130 million to about 272 officers to afford their 10 per cent while NHF was said to have paid the 90 per cent through Federal Mortgage bank policy.
Incidentally, nothing came out of Ringim’s investigation despite the hullabaloo that trailed it. And some commentators are pointing to this as capable of dissuading some officers in trusting the new initiative as many of them believe the scheme may go the way of the former.
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