More than 200 million Africans are living in slums, while cities accommodate 72% of slum dwellers across the continent, Issa Faye, of the research department at the African Development Bank (AfDB), said last week.
Faye, a Senegalese national, was speaking at the 31th annual conference on housing finance in Durban, South Africa. The event was hosted by the African Union for Housing Finance, in association with Banking Association South Africa.
Informal settlements have mushroomed across major African cities as urbanisation rates continue to increase at an alarming rate, generating a general panic among policymakers and politicians and creating social tensions between newcomers and locals.
Faye urged governments to start looking at the housing issues under the broader perspective of urbanisation.
Experts said the problem has been exacerbated by the lack of long term funding for poor people to buy houses.
Banks and micro-finance institutions have been described as ‘useless’ by frustrated people wanting to buy houses and get loans to finish their houses, reaffirming the theory that Africa’s mortgage markets are long dead and buried.
“In South Africa, for instance, the number of mortgage loans approved within the affordable housing segment between 2013 and 2014 dropped significantly by 20.44%, with an estimated nine out of every 10 mortgage loan application being denied,” Faye told visibly-shocked delegates.
“Likewise, in Angola, the formal banking sector accounts for less than 2% of housing loans, with banks rejecting an estimated 82% of housing loan applications.
“In Cameroon, the sole mortgage institution currently undergoing restructuring approved a paltry 262 housing loans in 2014 to serve an urban population of 12 million.
“In Kenya, a country of 45 million people, just 60 479 mortgage loans were outstanding between December 2012 and December 2014.“
Photo: The informal settment of Diepsloot in Johannesburg, South Africa. Credit: New York Times.