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National Housing Fund (Establishment) Act, 2018: Analysis & Recommendations For Legislative Review


The statutory sources of contributions to the Fund as well as investments in same by affected entities are as follows:

  • Contributions by Nigerians – both in the public and private sectors:

    The new NHF Act provides that 2.5% of the monthly income of an employee earning the national minimum wage[3] and above, either in the public or private sector, shall be contributed to the Fund[4]. Same rate of contribution is prescribed for a self-employed person with equivalent monthly income[5]. Employers of labour are required to deduct, at source, the prescribed rate of contribution from the monthly salaries of qualifying employees[6] and remit same to the Federal Mortgage Bank of Nigeria (the “FMB”) not later than one month from the date of deduction[7]. The prescribed contributions by self-employed persons are equally required to be remitted to the FMB personally by the affected persons, within the same time frame allowed for employers of labour[8]. The contributions to the Fund by the targeted Nigerians shall attract an interest of two percent (2%) per annum or any other interest rate as may be determined by the FMB[9].

    It should be noted that under the 1992 Act, self-employed persons are not covered and that the interest payable on contributions to the Fund by Nigerian employees is four percent (4%). This is significantly higher than the 2% rate provided in the new NHF Act. Also, the contribution of 2.5% of monthly income under the 1992 Act is applicable only to workers earning an income of Three Thousand Naira (N3,000) and above while the new NHF Act is expected to cover workers earning the minimum wage or its equivalent and above. 

3 The current national minimum wage is Eighteen Thousand Naira (N18,000) under the National Minimum Wage (Amendment) Act, 2011. This figure has been increased to Thirty Thousand Naira (N30,000) in the National Minimum Wage (Amendment) Bill, 2018 recently passed by the National Assembly and which currently awaits Presidential Assent to become operational.
4 Section 5(1) of the new NHF Act.
5 Section 5(2), ibid.
6 Section 8(1), ibid.
7 Section 8(2), ibid.
8 Section 9, ibid.
9 Section 5(3), ibid.