Housing finance is limited across Africa

FREDERICK KEBADIRETSE
Staff Writer | Friday September 24, 2010 00:00

 

The chairman of the African Union for Housing Finance (AUHF), Reginald Motswaiso, said this at the organisation's conference in Gaborone on Thursday.

Motswaiso, who is also the Chief Executive Officer (CEO) of the Botswana Housing Corporation (BHC), was presenting before delegates on a topic Challenges And Opportunities For Housing Finance in Africa: What It Means For The AUHF.

He said many African governments continue to dedicate a large portion of their annual budget to other socio-economic needs, putting housing finance on the back pedal.

A study from the World Bank showed that many sub- Saharan African countries prefer putting healthcare and education as high priority needs, giving a relatively small amount to housing.

Surprisingly, most of the countries in the region, including Botswana, allocated a huge chunk of their budgets to the military than to housing, despite the calm in the region.

Motswaiso said it is imperative for governments to realise that almost all other needs of their populations can be addressed while the people have good shelter, which can be made easier by an enhanced housing finance scheme.

He said housing finance in the continent continues to face social, technological and environmental challenges.Some of the social challenges he outlined include rural-urban migration, which he said leads to the formation of slums in urban centres.

Another problem he identified was that large families are synonymous with Africans, which often leads to income being sufficient to pay only for groceries.

The concept of high-density housing and a move from communal housing leading to more family units per household also poses challenges to financing. On challenges brought in by technology, he said high building standards imposed by authorities make it difficult to finance housing, especially at low cost levels.

On environmental issues, changing climatic conditions have been said to lead to high-risk premiums as financiers are increasingly becoming uncertain of what will happen in the future in particular regions across the continent.

He said as recommendations, AUHF should educate and lobby governments to make more budgetary allocations towards housing as a springboard to other socio-economic needs. He said governments should play a facilitator role to the bankable and give space for private sector participation in housing finance.

Giving a keynote address earlier, the Deputy Permanent Secretary (PS) in the Ministry of Lands and Housing, Gaolebe Lekula, shared Motswaiso's views, saying housing finance is a great challenge. Lekula said African countries share common challenges of housing finance, hence quick resolutions need to be taken to avert the current situation.

'The outcome of this conference will be a challenge for our government and others across Africa to re-think their strategies and re-focus their facilitation in housing delivery to their people,' he said.

He said housing is in itself a challenge everywhere hence it is the wish of every government for private institutions to finance housing and make it affordable to the population.

Lekula said as the government, they would do everything possible to support financing of housing in the country so that people have decent places to stay.

He said despite having a relatively small population compared to other African countries, Botswana is equally facing the challenge and collective efforts from the government and private institutions is needed to address the challenge while it can still be controlled.

The weeklong conference started with a training programme for the participants on Tuesday, with the actual conference on Wednesday, followed by an Annual General Meeting (AGM) on Thursday before concluding with a site visit on Friday.

AUHF is an association of 27 mortgage banks, building societies, housing corporations and other organisations involved in the mobilisation of funds for shelter and housing in 15 African countries.

Member states were represented at the conference where there was a total of 10 presentations, panel discussions and working groups to share ideas.