More investment in housing needed, experts warn

Affordable housing is not easy to find. (file photo)

With the rapid growth rate of the African population and unprecedented rate of urbanization, it is imperative for Africa to strengthen housing sector in order to sustain and expand its current flow performance, has cautioned Gabriel Negatu of the African Development Bank.

The official was addressing participants from 44 countries on June 7 during a meeting of Shelter Afrique, a Pan African financial institution that finances housing projects and related infrastructure in Africa.

For the official, housing sector is a key pillar of African growth. “By helping citizens acquire housing and build assets, it guarantees them a tangible step in their respective societies,” he said.

Yet Negatu remains worried that providing appropriate and affordable housing to the urban poor and responding to the sector’s high unmet financing needs remains key challenge.

According to Claudio Acioly, chief housing policy section at UN-HABITAT, every day, for the coming 15 years, urban Africa will host at least 40,000 new residents; which induce proliferation of slums and a great growth of urbanization in general.

“The situation is worse in urban areas, especially in low income segments,” said Soita Shitanda, the outgoing chairman of the annual general meeting and the Kenyan Housing Minister. “As results of these, most of African urban population in inadequate shelter, lacking access to basic needs, they live below poverty line and are excluded in many development processes.”

There is an estimated need for 4 million new housing units per year with over 60% required to accommodate urban residents, asserted Acioly, though conventional housing finance remains inaccessible by the majority.

According to the 2011 Yearbook, Housing Finance in Africa, 24% of the Africa’s population earn between US$ 4 and US$ 2 per day while 36.5% earn below US$ 2 per day.

As of the UN-HABITAT (2010), about 40.32% live in slums. At the same time, incomes are low while rate interests are too high to get an affordable housing.

Construction relies on imports 

Apart from the lack of access to financial means, the housing workforce is also still needy.

Eudes Kayumba, the vice president of Architects Association of Rwanda (AAR), recently told The Rwanda Focus that their association is composed of 32 members, plus over 40 who are not members.

Thus, in Rwandan case for example, the minister of infrastructure indicated that the country still relies on some foreign architects who are very expensive to hire.

Besides the imported workforce, construction materials ranging from the designs, piping, electrical materials, fittings, roof, doors to even the furniture are also imported thus making the housing industry more expensive.

It’s against this background that the African leaders who attended Shelter Afrique 2012 summit held in Kigali early June urged to minimize the housing cost by promoting home-grown innovations as one way of achieving low income housing on the continent.

“I want to challenge our engineers, scientists and technicians to come up with innovations that will make affordable housing made in Africa with African materials as viable reality,” the Prime Minister Dr Pierre Damien Habumuremyi urged.

Given these challenges, participants noticed that the housing sector development can never be left to the only private sector, but also African governments and other players in the housing sector have to intervene to ensure decent housing for all.

In Rwandan case, the Prime Minister Dr Pierre Damien Habumuremyi, told participants that his government is already playing its role. He expressed their determination to organize the housing sector through proper urban organic practices and to increase the level of urbanization from 20% to 35% by 2020.

In addition, the Minister of Infrastructure, Albert Nsengiyumva, said that jointly with the Kigali city council, they have carried out a survey to provide a clear picture of income distribution levels of every Rwandan that would ultimately help them to identify the purchasing capacity of different categories so as to determine the average cost of a house.

“We are sure that a great number of Rwandans do not need very expensive houses, but we need exact statistics to deal with the issue basing on facts,” he said.

According to the 2011 Yearbook Housing Finance in Africa, the annual housing demand in Rwanda is 25,000 houses. The same source also indicates that the smallest mortgage as suggested by the liquidity facility is Frw5.5 million (US$9 300). This requires a monthly income of approximately US$280, yet the cheapest house, built by a formal developer in Rwanda in 2011, was about US$72 000.

Posted by Eric Didier Karinganire on Jun 11 2012. Filed under National. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.