What Nigeria’s $9.4m fresh commitment in Shelter Afrique means for housing market
Recently, the Nigerian government made an additional capital injection estimated at $9.4 million into Shelter Afrique (SHAF), a development, experts say, has positive implications for the country’s housing market and, by extension, for its affordable home-seeking population.
SHAF is Africa’s continental housing finance institution owned by 44 African governments, African Development Bank (AFDB) and Africa Re. Its interest is chiefly in mortgage-backed, affordable housing.
Apart from Nigeria, other African countries have also made contributions to the housing finance institution totaling $16 million. Those countries are Lesotho, Mali, Namibia, Rwanda Uganda, Togo and Swaziland.
Nigeria’s new capital addition makes it the second-largest in the organization in terms of shareholding with 14.77 percent stake. The country comes behind Kenya which has 14.87 percent and ahead of the AFDB with14.28 percent. What this means, in a nutshell, is that there will be increased activities in the housing market and improved chances of homeownership.
Again, it places Nigeria in good stead to benefit from the organisation’s housing programmes and interventions across Africa. Besides a $3 million equity participation in the newly created Nigeria Mortgage Guarantee Company (NMGC), SHAF will, over the next five years, be investing about $180 million in Nigeria’s housing sector.
The continental housing finance institution, which was instrumental to the creation of the Nigeria Mortgage Refinance Company (NMRC), will be disbursing N180 million through credits to financial institutions, mortgages, and construction finance for public-private partnership projects.
The investment is in line with its 2019-2023 strategic plan that would help in reducing Nigeria’s housing deficit and increase the supply of over 100, 000 housing units annually. As of December 2018, SHAF’s portfolio in the Nigerian market rose to $14.6 million as the board approved the disbursement of lines of credit worth $16 million to two major financial institutions in Nigeria within the same year.
A major implication all these have for Nigeria is that the country will be benefiting from housing finance. The projects being considered are a public-private-partnership with the Kaduna State 60,000 homes, which is anticipated to create 300,000 jobs. The organisation is also in the final stages of providing lines of credits totaling $16 million to two Nigerian banks to create mortgages that will directly impact 4,700 Nigerians.
Andrew Chimphonda, chief executive officer of the institution, who gave these indications, noted that Africa has not been able to meet the expectations of the United Nations in terms of access to decent housing by African people even before COVID-19.
He added that the rate at which affordable houses are being provided is lower than the rate of urbanization, stressing the need for a commensurate provision of housing, else there would be further development of slums even after the pandemic.
Chimphondah also revealed the intension of the organization to assist Nigeria to raise bonds as soon as the country’s macro-economic environment stabilized, adding that the institution was planning to partner with the federal housing authority (FHA) on affordable housing for low-income earners under the Affordable Nationwide Housing Project (ANHP) scheme.
He pointed out that the project kick-started in Zuba, Federal Capital Territory (FCT) and would be replicated in Kwali, Bwari and forty-six other sites that have been marked out in Ibadan and Kaduna.
“The Kwali mass housing which is situated at Lambata, behind federal government college Kwali, encompasses 305 hectares of land and comprises of 12 blocks of I bedroom flat (192) and eight blocks of 2 bedroom flat (64) which sums up to a total of 256 housing units,” he explained
The house types captured for the project, he said, were one-bedroom, two-bedroom and three-bedroom units, with prices ranging from N3.1 million ($8,611) to N8.3 million ($23,055).
He added that Nigeria has continued to play a leading role in the organisation, pointing out that, beyond just capital contribution, the organization also receives active shareholder participation and guidance through the country’s board member.
“It is especially heartening to see in this age of nationalism that our African countries embrace multilateralism and Pan-Africanism as we collectively seek to address African challenges. Countries like Nigeria, historically, have always been at the forefront of such activities,” he stated.
Source: Business Day