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Monday, July 15, 2024

Dangiwa addresses housing affordability crisis at Shelter Afrique’s Kigali AGM

Nigeria’s Minister of Housing and Urban Development, Ahmed Musa Dangiwa, has highlighted the severe housing affordability crisis affecting over 80% of Africa’s population, driven by low incomes, challenging macroeconomic conditions, and rising living costs.

Shelter Afrique
Delegates at the 43rd AGM of Shelter Afrique in Kigali, Rwanda

Speaking at the Ministerial Roundtable on “Innovative Financing for Housing Affordability,” held during the Shelter Afrique Development Bank (SHAFDB) Annual General Meeting in Kigali, Rwanda, the minister said affordability is a moving target thus posing even a bigger challenge in achieving ‘housing for all’ goal.

“With each passing year, the affordability bar keeps getting higher,” he noted, emphasizing the urgent need for affordable housing solutions.

Dangiwa shared insights from his tenure as Managing Director of the Federal Mortgage Bank of Nigeria (FMBN), where he oversaw the design and financing of affordable housing units.

However, he pointed out that the steep rise in building material costs has made it increasingly difficult to maintain affordability, with the cost of housing units significantly increasing.

To address this crisis, Dangiwa outlined a multi-dimensional strategy emphasising innovative financing and collaborative efforts.

  • Key initiatives include: Interest-Free Budgetary Allocations: Utilizing budgetary allocations for housing without interest to lower costs.
  • Sub-National Government Partnerships: Engaging state governments to provide land free-of-charge, reducing the overall cost of housing units by up to 40%.
  • Public-Private Partnerships (PPP): Facilitating collaborations with developers under the Renewed Hope Cities and Estates Programme to deliver affordable housing units, with a portion sold at subsidized rates.
  • Real Estate Investment Trust (REIT): Working with various agencies to create a N1 trillion concessional financing window to provide low-cost funds for developers, aiming to expand the scale of housing delivery.

Dangiwa emphasised the importance of adopting new financial instruments and mechanisms tailored to Africa’s unique contexts, such as microfinance, mortgage-backed securities, and digital financial services.

“Traditional financing models have served us to a point. To bridge the housing deficit, we must explore and embrace new financial instruments and mechanisms,” he asserted.

The Minister also highlighted the significance of the Shelter Afrique Housing Solutions Fund, a 100 billion Naira real estate investment trust aimed at catalysing investments in affordable housing through innovative market-based solutions.

Concluding his remarks, Dangiwa called for collaborative efforts among all stakeholders, including governments, financial institutions, developers, community organisations, and international partners.

“Our goal should be to create a housing finance ecosystem that leaves no one behind,” he said. “Let us challenge conventional wisdom, explore uncharted territories, and forge new pathways to make affordable housing a reality for all Africans.”

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