MOFI’s role as Nigeria’s gap bridging investment vehicle

In his “General Theory of Employment, Interest and Money”, the economist John Maynard Keynes (June 5, 1883 – April 21, 1946) distinguished between three reasons for holding money by states, organisations and individuals: the transaction motive, the precautionary motive, and the speculative motive. Visionary leaders of nations must invest in instruments that will bring stable streams of income to ensure that their nations are financially buoyant as they cannot rely on taxes, levies, rents and fines alone. Most nations have special purpose vehicles (SPVs) in charge of their investments management. The United Kingdom has UK Government Investments Limited which works with His Majesty’s Treasury. The United States of America has U.S. International Development Finance Corporation (DFC) which is America’s development finance institution and Federal Investments Program (FedInvest) for federal agencies securities investments management.
Nigeria has MOFI, Ministry of Finance Incorporated, which was incorporated under the provisions of Section 2 and 3 of the Ministry of Finance Incorporated (MOFI) Act 1959 as an asset holding company under the Federal Ministry of Finance. Its mandate as the sole manager of all federal government investment interests, estates, easement and rights, positions it as a strategic institution to support the federal government’s effort to address several economic challenges and spur a renewal of the economy. Over the decades of its existence, MOFI, by virtue of the provisions of its enabling Act, has been in charge of the management of a significant portfolio of federal government investments, spanning a wide range of about 130 asset classifications, including Government Owned Entities (GOEs) and Government Linked Companies (GLCs), in which, amazingly, it controls a majority stake in more than 50 percent of these associated companies.
MOFI works on the principles of professionalising state ownership business entities – It works to ensure all state-owned entities are professionally managed and positioned to achieve greater economic impact by offering assistance and support both in terms of financial and technical.
Finance the economy – With 52 companies, over N18 trillion estimated value of holdings and over 15,000 workers employed, MOFI is a significant financial driver of the Nigerian economy. Without sounding immodest, MOFI is the greatest investment company in its class in Africa.
Source funding and investments for GOEs and GLCs – MOFI has the capacity to source for and acquire funding for the growth and development of all the companies under its portfolio.
Advance socio-economic objectives – MOFI is committed to pursuing initiatives that generate profit and impact all the key sectors and areas of the Nigerian economy.
MOFI is helping to transform Nigeria’s economy, by making it more diverse, prosperous, and optimised for investments and growth. Its vision is to become a world-class active investment vehicle that creates wealth for all generations of Nigerians and contributes to the development of the Nigerian economy, while its mission is to enhance the financial performance of portfolio companies. It aims to invest with the intent of preserving socioeconomic value of Nigeria through catalysing growth in priority sectors; develop a culture of performance and efficiency in all sectors and build a prosperous nation that attracts investors, both local and foreign.
MOFI’s new board of directors was inaugurated by the minister of finance and the coordinating minister of the economy, Mr Wale Edun, in July 2024, after the membership list was approved by President Bola Ahmed Tinubu. As a strategic sector and one with serious challenges which was acclaimed to have about 22 million housing deficits and one of the worst housing challenges in the world, MOFI identified the Nigeria housing sector as one of its priority investment destinations. Through this intervention, the federal government took a significant step towards addressing Nigeria’s housing finance gap with the launch of the Ministry of Finance Incorporated (MOFI) Real Estate Investment Fund (MREIF). This is a ₦250 billion initiative designed to provide low-cost, long-term mortgage financing for property developers and stimulate economic growth through the housing and construction sectors. As a sector supplying basic needs in the economy, housing provision can be used to stimulate the economy by providing job opportunities to the people; provide income to high numbers of people like site workers, food vendors, building materials suppliers, etc; increase infrastructure level and improve security.
During the signing ceremony of the initiative in his office in Abuja, the minister emphasised that the fund addresses Nigeria’s housing finance gap by offering mortgages at 12 percent with repayment terms of up to 25 years. This negates the anti-investment high-interest, short-term loans currently offered by commercial banks. The first series of the fund, amounting to ₦150 billion, which was fully subscribed, is expected to drive private sector participation, with the second series set to raise an additional ₦100 billion. This programme is in consonance with President Bola Ahmed Tinubu’s vision to promote homeownership, create jobs, and support economic development. This fund is a public-private partnership (PPP) with the aim of incentivising developers to build affordable homes, thereby creating jobs and increasing commercial activity in the real estate and construction industries. The managing director of MOFI, Armstrong Takang, stated that the initiative would enable Nigerians to build generational wealth through sustainable homeownership.
The launch of the MOFI Real Estate Investment Fund signifies an important milestone in Nigeria’s quest for economic growth and development. With its innovative approach to housing finance, this initiative is poised to unlock new opportunities for Nigerians, foster economic development, and leave a sound legacy for coming generations. With the level of its acceptance so far by key stakeholders, including government officials, private sector leaders, Nigerian citizens both local and in Diaspora, foreign investors and financial institutions, there seems to be strong support for this transformative initiative and what remains is for all players in the housing industry to support this laudable programme.