For its large-size population, high housing deficit profile and low homeownership level estimated at 200 million, 17 million units and 25 percent respectively, Nigeria’s housing market is,clearly, a low hanging fruit for savvy and strategic investors.
This explains the investment interests shown by both continental and international institutions like Shelter Afrique which sees Nigeria as a key market for them, especially in affordable housing delivery.
Shelter Afrique is a partnership of 44 African governments plus the African Development Bank (AfDB) and the Africa Reinsurance Company whose aim is to provide funding solutions for new affordable housing projects.
To fully leverage opportunities in the Nigerian market, the continental body recently signed a memorandum of understanding (MoU) with Nigeria’s Family Home Funds (FHF)—a social housing initiative promoted by the federal government as part of its social intervention programmes.
The funds, which focuses on affordable homes for low-income earning Nigerians, has an initial shareholding by the Federal Ministry of Finance and the Nigeria Sovereign Investment Authority,.
It hopes that, by 2023,it shall have invested up to N1.3trn (US$3bn) in the development of 500,000 homes for low-income earners and, in the process, create up to 1.5 million jobs and, through that too, enable homeownership.
At the agreement signing event which was prformed in Abuja by the chief executives of Shelter Afrique and FHF, Andrew Chimphondah and Femi Adewole respectively, the continental body offered insights into its affordable housing delivering strategy.
It pointed out that Nigeria is its biggest market. “We are very grateful to get into a partnership with Family Homes Funds and we are delighted to sign the MOU. One of the things we realised when we re-strategized over the last few years is that beyond financing affordable housing, one of our strengths was leveraging our partnerships and networks,” said Chimpondah.
He explained that they were happy to be signing the agreement, not only because it fits into their strategic direction, but also because Nigeria is a key market and Family Homes Funds has a better understanding of the local market.
“The idea is to co-fund specific deals, share market knowledge and operate in line with best practices. In the end, our core vision is to develop decent and affordable homes for all Nigerians and if we work together to solve the affordability challenge on the demand and supply side, we will be able to achieve a lot,” he hoped.
Earlier, Adewole had described the MoU signing as “a small but momentous occasion,” explaining that Shelter Afrique has been a housing financing organisation for more than 35 years with significant experience across very many countries while FHF is barely a couple of years old.
“This partnership and relationship birthed out of this MOU provide the beginning of what I hope and expect; we will work assiduously for it to be a very successful relationship and we will ensure that we create homes for Nigerians who need them most,” he assured.
The signing of the MOU, according to him, is the first in what would be a weekly series of meetings held by a committee with members drawn from both organisations.
The meetings are expected to result in specific co-funded affordable housing projects which have been identified as low hanging fruit projects that are affordable and below N9million per home. Both firms have committed to co-financing, at least, one project before the end of 2019.
CHUKA UROKO
