Shelter Afrique has raised hope for investors in housing development as it designs a sovereign lending product to provide an alternative funding source for those projects. The product, according to the pan-African housing development financier, will be sold in the capital market.
Africa, particularly Nigeria, has a wide housing gap, and the capital available to bridge this gap is insufficient, informing the organisation’s decision to design this innovative product.
Nigeria, for instance, has a very wide housing demand-supply gap estimated at 20 million units. Lack of capital is at the core of the causes of this deficit which seems insurmountable despite public and private sectors efforts.
In response to this continent-wide problem, Shelter Afrique revealed in a statement recently that it has conducted an in-house capacity building in partnership with the African Development Bank (AfDB) ahead of the launch of the product.
The statement explained that this product would supplement the institution’s traditional products that attend to both the demand and supply sides of the housing value chain.
An official of the company, Kingsley Muwowo, noted that the contraction in Africa’s gross domestic product (GDP) from the Covid-19 pandemic was an alarming sign of a slump in the inclusive housing goals in many countries.
Muwowo, who acted as managing director before Thierno-Habib Hann stepped in as the new chief executive officer, added that there was need by the company to respond to the risk of a possible governments’ disengagement while revitalising its financial agility.
“The Covid-19 pandemic has brought in an era of economic distress throughout Africa with an average of 3.6 percent recession in 2020, the first recession in SSA in 25 years,” Muwowo noted.
“In response, Shelter Afrique recently reviewed its corporate strategic plan with the aim of aligning itself to its members’ priorities and positioning the company for better performanceand enhanced development impact,” he added.
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Shelter Afrique is the only pan African finance institution that exclusively supports the development of the housing and real estate sector in Africa. It is a 44-member institution which includes Nigeria.
Recently, Nigeria as one of the most active member-countriesraised its stake in the company to 15.8 percent, though still behind the largest shareholder, Kenya, which controls 16.85 percent.
According to Modupe Gbadeyanka, a current affairs analyst, the relationship between Nigeria and Shelter Afrique has been growing in recent years, recalling that in September 2020, the institution received a $9.4 million additional capital subscription from Nigeria and recently, the country paid an additional $7.15 million to increase its holding to the current level.
Muwowo commended the government of Nigeria for their continued support and the importance they have placed on affordable housing. “We are especially grateful to the Minister for Works and Housing, Babatunde Fashola, and the Minister for Finance, Zainab Ahmed, for their long-term support and for honouring this significant payment.,” he said.
Gbadeyanka listed other countries that have so far ramped the capital subscription in the institution in 2022 as Swaziland and Burkina Faso which paid $317,854.54 and $34,610.00 respectively, for additional stakes.
Muwowo disclosed that, so far, they have received $7,504,295.45 in additional capital from member states within the last six months of 2022. He commended the shareholders for this much-needed capital injection which will go a long way in strengthening the capital structure of the company.
He hoped that this would support the on-going fund-raising efforts to raise additional debt capital required to support the project pipeline which now stands at $1 billion across 44 member countries.
