Housing Finance and Inclusive Growth in Africa: Benchmarking, Determinants, and Effects

This is a publication from the World Bank.

‘Using a partially constructed panel database of 48 Sub-Saharan African countries from 2000 to 2013, this paper analyses the structure of housing finance in Africa, its determinants, and its impact on inclusive growth. The findings show that market capitalisation and urbanisation are key positive determinants of housing finance, and the post-conflict environment is conductive to greater housing finance development. This result suggests that housing finance is driven by standard market forces of demand and supply. In addition, the analysis finds that housing finance development in Africa is not yet an effective tool for reducing economic inequality, at its current, very early stage. However, the paper shows that above a given threshold, housing finance could be efficient at reducing inequality. Finally, there is a slightly positive relationship between housing finance and greater economic development in Africa. All these findings suggest that policies to boost housing finance development in Africa would be fruitful in the medium to long terms.’

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