Extract from a paper titled, Investment Theme: Access to Housing, from the Bertha Centre for Social Innovation and Entrepreneurship, University of Cape Town, and the Skoll Centre for Social Entrepreneurship, University of Oxford:
‘Overview African countries are currently experiencing a demand for affordable housing which far outstrips supply. The housing crisis is a result of several demographic shifts creating a deficit in the housing sector which is expected to worsen in coming years. It is forecasted that in Africa, the average densities will increase from 34 persons per square kilometre in 2010 to 79 persons per square kilometre in 2050. This, in conjunction with inadequate urban government policies, socio-economic inequalities, and low urban institutional capacities, has caused a proliferation of urban slums. The housing backlogs of African countries are large and growing.
In 2015, Nigeria’s backlog was estimated at 17 million units, and is expected to increase by 2 million units per year. Kenya’s backlog is estimated at 2 million units, and is growing by 30,000 units per year. South Africa’s is 2.3 million units, growing by 178,000 per year.
Rapid urbanisation is a strong contributor to the housing crisis. The United Nations predicts that the urban population in Africa will surpass the rural population by 2037. In 2014, the total African urban population was 450 million, which is expected to rise to 1.3 billion in 2050. By 2050, African urban dwellers will account for 20.2% of the world’s urban dwellers, up from 11.3% in 2010. In addition to this, the projected labour force is expected to increase to 1.1 billion by 2040, which is a significant contributor to the migration from rural areas to cities.
Other demographic forces contributing to housing shortages are population growth and income growth. The African population is relatively young, with the average age being 19.7 in 2012, expected to increase to 25.4 in 2050. This young demographic is expected to drive the demand for housing even higher and to create the need for subsets such as student housing. African incomes are also rising as a significant portion of the population is emerging from poverty with first-time access to consistent disposable income. This emerging “middle-class” is also driving demand for affordable, high-quality housing.
In response to the housing crisis, African governments have been promoting new urban developments and creating satellite cities in attempts to reduce the pressure on cities. It is expected that these new towns will be surrounded with informal settlements created by the low-income labourers looking for work and being employed to service these towns. In order for this crisis to be adequately addressed, African cities need to have realistic and sustainable national urban development policies as well as urban management capacities, better distribution of urban populations and better access to urban livelihood opportunities. Strong partnerships with the private sector, including private investors, are critical to ensuring that the housing crisis is adequately addressed in the years to come.’