Africa’s urban housing in crisis, needs greater care, massive investment

Africa’s urban housing in crisis, needs greater care, massive investment

Hordes of frustrated residents evicted from buildings and land they have been occupying illegally, mushrooming of squatter camps (slums) on the outskirts of cities, middle-aged men and women sleeping rough at bus and train stations, four or five entire families squeezed in one room or one-bedroom flat, rent increasing every three months as demand outstrips supply, landlords asking up to one year of paid rent in advance in countries such as Ghana, Nigeria and Togo, and rural folks flocking to cities to search for jobs and wondering where to sleep.

These scenes, including many more not included here, are the realities of Africa, a continent in full mutation where UN Habitat says 46 cities are now larger than one million people.

What can be done to deal with this situation? This has become a one-million dollar question on every policymaker and investor’s lips.

However, while these ‘people in power’ wonder what to do next, the truth is that they seem not to be doing enough to help solve these problems.

A housing conference hosted on 11-13 September 2013 by the African Union of Housing Finance (AUHF) in Mauritius says Africa’s housing need is growing quickly, and demands much greater attention than it receives by policymakers and investors.

While the perception among many Africans is that a lot of money is being invested to move the sector forward, in reality however, delegates attending the AUHF conference were told that Africa’s housing investment remains limited, compared to other forms of infrastructural investment.

This comprises only 9.6% in total capital invested in Africa’s infrastructure projects up to February 2013, and only 1.5% of total projects, AUHF says.

“Not only is housing investment dwarfed by investment in large-scale infrastructure projects such as energy production, transport and logistics, it also falls behind investment in commercial construction,” the conference says.

The conference identified five areas where governments, the private sector and development finance institutions should urgently focus to enhance the performance of
Africa’s housing markets, and improve their investment grade:

•    Clarity of rights:
Governments across Africa should streamline and prioritise their land titling and ownership land legal frameworks in favour of effective housing markets.

•    Serviced land for housing:
A key constraint facing housing developers in the delivery of housing at scale is access to serviced land  for housing. Government can facilitate increased construction by making serviced land available to developers for specific target markets.

•    Partnerships:
Due to the complexity of housing, partnerships become a necessity, and these must be well structured, with each player taking a role appropriate to its own capacity. Therefore, governments need to set an appropriate an  enabling legal and regulatory framework.

•    Affordability of formal housing
Innovative building systems, new technologies and incremental construction approaches are all ways in which the cost of the housing product can be reduced to accommodate the affordability of consumers.

•    Financial innovation:
Africa’s capital markets are shallow and secondary markets are ineffective, the AUHF conference says.  Therefore, it urges policymakers to facilitate the creation of an environment conducive to long term funding.

For low-income households, housing microfinance offers an important opportunity to finance housing on an incremental basis.

Photo: A slum on the outskirts of Kenya’s capital Nairobi

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One Response to Africa’s urban housing in crisis, needs greater care, massive investment

  1. moladi September 24, 2013 at 12:54 pm #

    Another great article – thank you for highlighting the issues – moladi Construction Technology