Republic of Congo has a limited housing finance sector. As the mortgage market does not yet meet the breadth of the population who might afford a mortgage, most households still finance their housing independently, with savings or non-mortgage credit.
The lowest recorded interest rate on a mortgage in Republic of Congo is 16 percent, as of September 2016, and requires at least a 20 percent down payment. The cheapest newly built house by a developer recorded by CAHF is CFA Francs 9 million (US$ 18 000).
With an urbanisation rate of 3.2 percent, demand for affordable housing will remain strong, both for rental and purchase. Housing microfinance will play an important role in increasing the supply of housing, and efforts to increase access should be undertaken. Today, private interest in the sector is increasing, with notable increases in public and private investment each year. Several projects are underway, including 3 000 units planned through public-private partnerships. With a good macroeconomic environment, sound policy, better data and increased access to affordable credit, an enabled housing market can increasingly provide housing that the average household in Republic of Congo can afford.
Find out more information on the housing finance sector of Republic of Congo, including key stakeholders, important policies and housing affordability:
- Access to Finance
- Housing Affordability
- Housing Supply
- Housing Policy and Regulations
- Property Market and Housing Sector Opportunities
Each year, CAHF publishes its Housing Finance in Africa Yearbook. The profile above is from the 2016 edition, which has up-to-date profiles for 51 African countries.Download yearbook
Congo, Republic of the
The Congo Republic is one of Africa’s most urban countries, with more than two-thirds of the population living in towns and cities. Public services and economic activity are concentrated in the two big cities, Brazzaville and Pointe-Noire, home to around 60 percent of the population. Brazzaville is the administrative and political capital (38.9 percent), and Pointe-Noire, the economic capital (20.6 percent). The government introduced a policy called “accelerated municipalisation” which has as its aim to rapidly develop the country’s urban transformation. This is to be done through building socio-administrative infrastructure in all provinces and special economic zones in the country’s four main towns and cities.
Congo has an estimated population of 5 125 821 and an average annual population growth rate of 2.6 percent as of the end of 2016. It had a GDP per capita of 1 528 and a GDP growth rate of -1.9 in 2016. The real GDP growth rate was 2.6 percent in 2015 and it was estimated at -2.4 in 2016. Crude petroleum is an important resource and it accounts for 61 percent of Congo’s exports and 60 percent of its gross domestic product, timber is the second largest export product. Overall growth was predicted to be 4.2 percent in 2016 and 4.7 percent in 2017, this would be a result of greater oil production from new wells and assistance from other sectors.
Congo Republic’s score on the UN Human Development Index went from 0.590 in 2014 to 0.592 in 2015, which is a slight improvement. However, the Gini co-efficient was at 48.9 in 2016 according to the World Bank, which reflects an unequal society in which poverty is rife. As a result, unemployment is high, particularly for women, youth, and those living in the main cities of Brazzaville and Pointe Noire, with the rate of unemployment for those aged from 15 to 29 years standing at about 32.7 percent, according to the 2011 ECOM Survey and the total unemployment of the labour force was 11.2 percent in 2016. The informal sector accounts for 75 percent of urban jobs, which are mostly in low-productivity services and commerce. What could have been a burgeoning industrial sector has been impeded by structural weaknesses in transport and energy supply, industrial jobs are three percent of the total and administration accounts for 19 percent.
Access to Finance
The Bank of the Central African States (BEAC) is the regional Central Bank of the Central African Economic and Monetary Community, serving six African countries – Cameroon, Congo, Gabon, Equatorial Guinea, Central African Republic and Chad. The Central Bank head office is located in the capital of Cameroon. These six countries share a single currency and unified financial and banking legislations. Congo suffers from high overhead costs of Congolese banks, which are comparatively speaking, amongst the highest in the world. This is a result of the poor business environment and the lack of public credit registries in Congo.
Congo’s formal financial system is not well developed. There were 3.96 commercial bank branches per 100 000 adults and 8.19 ATMs per 100 000 adults in 2015. Congo scores low in terms of ‘ease of getting credit’, ranking in 118th place out of 189 countries according to Doing Business Report 2017, thus down from 109th place recorded in 2016.
Congo had 10 banks as of 2015. There are 75 Micro-Finance Institutions, 34 of which are independent and the rest organised under the network of the Mutuelle Congolaise d’épargne et de Crédit (MUCODEC) – Congolese Savings and Loans Mutual. The main banks providing banking services are BGFI Bank, the Banque Congolaise de l’Habitat, the Congolaise de Banque, United Bank for Africa, the Banque Commerciale Internationale, Ecobank, Espirito Santo Bank, Société Générale, the Banque Postale du Congo, the Banque Syno-Congolaise pour l’Agriculture. Agricultural Bank of China is to open a new subsidiary in Congo, the Sino-Congolese Bank for Africa (BSCA Bank). The official headquarters are being built and should be operational by early 2018. BSCA Bank is 50 percent owned by the Agricultural Bank of China.
The main commercial banks in Congo have been privatised. However, the commercial banks provide credit and services primarily to large clients involved in the sectors of oil, forestry, telecommunications, import-export, and services. The Congo’s informal economy is predominantly cash based, and commercial banks serve only a small segment of the market. The country’s largest credit union, MUCODEC, provides small and micro-loans to businesses and private individuals. Several banks, including United Bank of Africa and La Congolaise de Banque, have started to offer loans of up to US$100 000 to private individuals and small businesses in recent years.
The number of savings banks remains low. The mortgage finance market is still in its infancy, but with huge potential for growth. Very few banks provide medium-term and long-term credit. A bank that grants this type of credit is SOCOFIN in Congo Republic. Nearly 70 percent of loans in Congo require collateral. The value of the collateral on average significantly exceeds the value of the loan. The Congolese tend to use bank accounts for business purposes more than the regional average, other uses of bank accounts include receiving government payments and wages, as well as for sending/receiving remittances. This is shown by the comparatively widespread use of bank tellers for deposits in Congo, as well as the limited use of advanced payment services such as ATM machines.
In the formal sector, the state is the largest employer, offering an average monthly salary of about CFA Francs 150 000 (about US$ 269). Though rapidly growing, the formal private sector is still very small. Most people are involved in the informal sector with a high percentage of people living under the national poverty line at 46.5 percent in 2011. The 2014 World Bank report states that Congo has 50 percent of the urban poor against 75 percent in rural areas. It ranked 135th out of the 188 places in the Human Development Index in 2015.
Construction costs in the urban and semi-urban areas are high and increasing. It costs about 9 million CFA francs (about US$16 130) to build a standard three bedroom house in the main urban areas. This is mainly because of the high costs of inputs such as cement, sand, plates, iron, finishing’s and decorations. In the rural areas, the construction costs are lower as most of the houses built are of a semi-standard and sub-standard materials, with local materials such as sun-dried bricks made from clay. Based on the most recent World Bank statistics, in 2014 an estimated 43.2 percent of households had access to electricity. However, the 2015 socioeconomic studies sets the number of households connected to the electricity network as low as 22 percent for Brazzaville and 39 percent for Pointe-Noire.
The proportion of unplanned settlements in the two main cities of Brazzaville and Pointe-Noire is around 60 percent of the land area, or about 10 000 hectares, with a high proportion of housing stock (35 percent in Pointe-Noire) made from fragile materials. In 2005 (latest figures available), these areas hosted 64 percent of households in Brazzaville and approximately 50 percent in Pointe-Noire. A 2009 study of poverty carried out in the two cities revealed a significant lack of access to basic infrastructure and services. This was confirmed by more recent data (2012) from UN-Habitat on Pointe-Noire and PEEDU-funded socioeconomic studies of the two cities (2015).
In Congo Republic, housing is comprised predominantly of single-family homes. The surveys indicate that 57.7 percent of all households own and live in single-family homes. Most rural households live in single-family homes (83.4 percent) while in the cities there is a greater tendency (49.2 percent) towards houses comprising several apartments. This situation is attributable to the relatively high cost of land and construction in the cities. In general, in both urban and rural areas, many properties can be considered slums owing to their informal construction, as opposed to villas which reflect a privileged standard of living.
The number of new housing units that enter the market annually for rental and purchase for ownership is insufficient to meet the demands of the increasingly urbanised population and the growing middle and upper class population. A quarter of the Congolese population lives in the capital Brazzaville. The demand for housing has increased without a subsequent increase in supply. This increasing mismatch between demand and supply for housing continues to push up house prices both for ownership and rental. In Brazzaville and Pointe Noire, housing demand was estimated at 13 550 units per year versus an annual delivery of just 2 000 units.
There is an increasing number of local housing companies and developers from the USA, Canada, China and South Africa who are entering the housing market using a BOT (Build, Operate and Transfer) model. Most of the new housing developments are driven by demand for high quality housing by expatriate communities. There are no large-scale development activities to provide housing for middle-income people. However, this situation is set to improve in the very near future with the recent interest and activity of developers in the region.
Congo introduced the Bank co-financed Water, Electricity, and Urban Development Project (Projet d’eau, d’électricité et de développement urbain, PEEDU) in 2010. The US$125.5 million project is funded at 80 percent (US$100 million) by the government and 20 percent by the Bank (US$25.5 million). An additional financing for the project of US$150 million for the electricity sector was approved in 2014 (US$60 million blend IDA/IBRD and US$90 million government financing). It is an example of the new partnership program with the Congo Republic, whereby the role of the Bank was to assist the country to improve selectivity and efficiency in its own programs, with the government providing the major part of investment funds.
Under the PEEDU, a new urban policy was elaborated and detailed in a sector policy letter. The policy letter provides a reference framework for 2012-22 with regard to urban sector actions and investments. It defines strategies to promote sustainable development of urban centres, accounting for challenges related to urban organisation, land administration, taxes, infrastructure, and service delivery.
The development objectives of the Urban Development and Neighbourhood Upgrading Project for Republic of Congo are to: (i) improve access to infrastructure and basic services for people living in selected unplanned settlements in Brazzaville and Pointe Noire; and (ii) strengthen government and municipal capacity for urban upgrading. The project comprises of three components. The first component, integration and neighbourhood upgrading objective is to provide access to infrastructure and basic services in targeted neighbourhoods and improve connectivity and network integration with the rest of the city. It consists of following two sub-components: (i) connectivity and network investment program; and (ii) upgrading investments. The second component, development of institutions and capacity objective is to institute an integrated approach to upgrading existing unplanned settlements and to reduce the emergence of new unplanned settlements. It consists of following four sub-components: (i) community facilitation; (ii) neighbourhood upgrading plans; (iii) urban sector organization and regulation; and (iv) city-level institution building. The third component relates to, project management, coordination, and evaluation will fund incremental operating costs for the project coordination unit (PCU).
The Fuller Centre is working with the International Partnership for Human Development, Engineering Ministries (eMI), USAID, Embassy Brazzaville and B.L. Harbert International to build 30 homes in Makana II. The town – just west of Brazzaville – is bisected by the Route National No. 1 highway. Recent restorations to No. 1 meant that several homes in Makana II had to be demolished to allow for a 25-meter buffer zone on either side of the highway. On May 25, 2008, the Fuller Centre and its partners began constructing 24 houses in Makana II on plots of land already owned by the villagers. The residents decided on two-bedroom homes to be made of baked clay bricks with corrugated metal roofs and a front porch. Homeowners will pay the equivalent of US$20 on a long-term, fixed-rate payment schedule.
The Housing construction program in the municipality of Kinétélé is a firm order for the Congolese state on behalf of EMT Building subsidiary Alliances. This is a housing construction program in the municipality of Kinétélé (northern suburbs of Brazzaville). This program of 4 000 residential units is spread over a land reserve of 100 hectares. The site will host an urban centre with 22 facilities (sports complex, 43 showrooms, shopping centre, court, city hall and hotel). Work commenced in 2014.
A project of at least 10 000 social housing units to be built by the Douja society Promotion Addoha Moroccan Group in the capital Brazzaville and Pointe-Noire was commenced in 2014. These homes will be added to those currently under construction in the two cities and will be part of the renovation of the urban landscape that will cover an area of 40 hectares with 20 hectares for each city.
On an area of three hectares, the area 68 to Manianga, located in the 9th district of Brazzaville (Djiri) is a social housing construction project called “Better Living in the neighbourhood.” Work started in January 2016 and a total of 115 units are under construction. Some houses are already nearing completion. There are three types of housing: two bedrooms plus a dining room; three bedrooms plus a dining room and four bedrooms and a dining room. These houses are built with sustainable materials, manufactured largely on site. The project is supported by a local bank.
The company Maisons sans frontières Congo has projects underway. These include; the ROC-BIME project in Brazzaville which is a residential complex which includes 1 200 buildings. It is located in the northern suburbs, Mount Barnier, in an area of 150 hectares. Residents will be able to choose from six types of homes, ranging in size from 500 square feet to 570 square feet. The project “Residences Caribbean” in the new town of Kunda is 15 minutes from the city centre by a new road along the coast; the project consists of 3 000 houses and is a 600 hectare site. The development works started in October 2014 and the first houses started in the month of August 2015. A smaller housing project is DNS Residences, to be built in the city of Oyo, in the northern part of the Republic of the Congo, almost 400 kilometres away from Brazzaville. The entire complex will have 300 homes, situated on a 74-acre lot of land as with the other two complexes. This project was introduced in late 2016.
Housing Policy and Regulations
The government has been slow in putting in place reforms that would address the constraints to housing supply. The main constraints are in the areas of land ownership and property registration (getting land title certificates), access to serviced land, construction and development, and the availability of finance. According to the World Bank’s 2016 Doing Business Report, the Republic of Congo made transferring property less costly by lowering the property transfer tax rate. In 2017, it costs 12,3 percent of the property value to register property.
On 26 September 2013, the President of the Republic, Mr. Denis Sassou-Nguesso, promulgated Law No. 19-2013 establishing the Sn-HLM (National Society of Low-Rent Housing), which is a public industrial character and trade, under the supervision of the Ministry of Construction, Urban Planning and Housing. The creation of this company is an important link in the process of access to social housing, thus completing the process for Congolese to access housing.
Congo Republic is party to the Organisation for the Harmonisation of Business Law in Africa (OHADA), a commercial code adopted by 16 African countries that governs investments and business practices.
Law No. 24-2008 on Land Tenure determines the regime for the recognition, possession, use and exploitation of urban land areas of public and private persons. Law n° 27 – 2011 of 3 June 2011 established the Land Agency for Land Development which creates a public institution of an industrial and commercial nature called the Land Development Agency which is responsible for carrying out land acquisition operations; the development and disposing of areas of land necessary for the realisation of projects of general interest and to contribute, on behalf of the State, to the collection by the public treasury of the rights and fees relating to the acquisition, development and transfer of land. Law No. 17-2000 on the Land Ownership Regime; real property and real property rights belonging to natural or legal persons of Congolese or foreign nationality are subject to the provisions of this law.
Property Market and Housing Sector Opportunities
The Republic of Congo has accumulated, since its accession to national and international sovereignty, a significant shortfall in housing that is a real social problem. As a result, the construction industry currently enjoys a favourable climate for its development due to the accelerated municipalisation policy and the policy of modernisation of social habitats in the country. This is line with “Congo, an emerging country by 2025” which is the goal that the government has set.
Today, private initiatives are increasing, public and private investors show a notable increase each year in Congo. Several projects are running, including public-private partnerships. Through these partnerships, more than 3 000 housing units were started, 600 of which are being finalised. To encourage private investment, the government has set up an incentive and an advantageous framework for business taxation and customs.
There are huge opportunities for retail, commercial and industrial real estate in the urban and semi-urban areas. Despite the building market and booming construction, rents in Congo continue to rise. To this must be added the scarcity of homes for rent.