African governments have been urged to make housing financing affordable to low income earners since mortgage financing is expensive, risky and only for the rich.
This was among recommendations made at the 30th Annual General Meeting for Shelter Afrique in Nairobi recently. It was conducted under the theme “Mortgage Finance for Increased Access to Housing in Africa.” It provided an opportunity for stakeholders in the mortgage industry to share experiences and chat the way forward to address the emerging issues.
A statement released by the Uganda Media Centre said the meeting noted the need to address a housing shortfall in Africa due to rapid urban growth, as Africa is currently experiencing five per cent annual urban growth rate which is the fastest in the world. This has resulted in environmental degradation and the onset of slums.
It also highlighted the desire for African governments to invest more resources in housing and stressed that innovative housing finance strategies are critical.
“The cost of housing should be reduced. Mortgage financing is expensive, risky and only for the rich. African Governments must make property financing affordable to low income people,” according to Uganda’s Minister for Lands and Housing Daudi Migereko Migereko.
Migereko added that Shelter Afrique will come up with a concrete proposal to unlock mortgage to enable people to access housing.
Shelter Afrique was applauded for its role in facilitating development of housing mostly in the middle income households and at the same time promoting the use of locally available materials with modern technology to make construction affordable.
The meeting also challenged Shelter Afrique and mandated to mobilise resources for housing development in Africa, to ensure ways of reducing the costs of housing construction. the agency was established by African Governments, the African Development Bank, Africa-Reinsurance and the Commonwealth Development Corporation.
Earlier at the meeting, Kenya’s President Mwai Kibaki’s said that the theme was timely to address the housing shortfall in Africa due to rapid urban growth and that Africa is currently experiencing five per cent annual urban growth rate which is the fastest in the world. This has resulted in environmental degradation and the onset of slums.
He added that Africa must invest in more resources in Housing stressing that innovative housing finance strategies are critical.
According to him, mortgage financing is expensive, risky and only for the rich and Africans must make property financing affordable to low income people, and the cost of Housing should reduce.
He hoped that the meeting will come up with a concrete proposal to unlock mortgage to enable people to access housing, while noting that since 1982, Shelter Afrique had played a crucial role in facilitating development of housing mostly in the middle income households, for instance, in Kenya, Shelter Afrique has funded over 86 projects at a cost of 111 million USD which has resulted to an increase in Kenya’s economy.
“Use of locally available construction materials should be used with modern technology to make construction affordable. The Banking Act has been amended to accommodate extension of credit to the real estate sector. E.g. mortgage companies are now allowed to operate current accounts to mobilize deposits and Banks can advance up to 40 per cent of their total deposits up from 25 per cent for investments in real estate.
President Kibaki ,however observed that cost of borrowing money to build a home was too high, hampering Kenya’s development, and challenged Shelter Afrique to find ways of reducing this and requested all present to focus on this dimension.
He added that use of locally available construction materials should be used with modern technology to make construction affordable, adding that his country’s Banking Act has been amended to accommodate extension of credit to the real estate sector.
At the meeting, Ghana joined Shelter Afrique, a Pan African housing finance and development institution as its 43rd member.
Deputy Minister of Water Resources Works and Housing, Dr. Mustapha Ahmed, attended the 30th annual general meeting and symposium of Shelter-Afrique in Nairobi, Kenya.
The organization is solely dedicated to the development of the real estate sector.
The company came into existence against the background of the acute housing shortages prevalent in most African countries and the urgent need for African governments therefore to pool resources to tackle the problems. In the words of the founding fathers, “the Company was to mobilize capital from which loan and equity resources can be made available to national housing development institutions in Africa for approved schemes.” Operational activities commenced in 1985 and since then Shelter Afrique has developed a robust portfolio of projects and activities, acquired substantial operational experience and established itself as a credible housing finance institution.
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Source: The Guardian