Unlocking Africa's potential for housing finance.

Author:Ojulu, Epajjar

The Housing Finance Forum that took place in July 2018 in Uganda recognised the issues around housing for those on low incomes, and the challenges that need to be addressed if sub-Saharan Africa is to unlock the potential for housing micro-finance in particular and economies in general.

The forum identified a wide range of housing sector issues for those on low incomes. One of the challenges discussed was the current high cost of land, building materials and construction costs, which have kept the price of houses too high for low-income earners. The trend is the same across sub-Saharan Africa. The Forum noted that a way forward is for individuals to take charge of the construction of their houses so that they source relatively cheap materials and labour, which can reduce the cost of construction. Commercial developers cannot address housing development for low-income earners in Africa because low-income earners cannot afford the houses they build. This partly explains the glut in the upper and middle-tier housing markets in Uganda and Kenya, for example, and the scarcity at the lower end of the market.

The changing demographics in Africa create a compelling need for a policy shift in homes development financing. According to the Mastercard Foundation's Ruth Dueck-Mbeba, the IMF estimates that over the next 12 years, the youth population of Africa will rise to 375 million. Considering that these youths will raise families, this presents both a challenge and an opportunity for the housing finance sector. It is a challenge to build homes for the rising population on the one hand and on the other, it is an opportunity to lay private sector-driven foundations for a sustainable housing sector on the continent. The Forum argued that finding a solution to the housing crisis in Africa is inevitable as it is the only way of averting the serious consequences for the population that would arise from a lack of adequate housing.

The Forum tackled the issue of problematic land laws, which exclude the poor from formally owning land either because they cannot afford the levies and professional fees demanded to process a title deed, or due to traditional beliefs. Families often apportion land to their members, who then experience such financial issues. Another barrier to home ownership is that in many African societies women are not allowed to own land. The Forum urged financial institutions to expand finance to women, who statistics show are less of a risk...

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