Globally, urbanisation is rapidly increasing, and this continues to put pressure on urban development especially in Africa and Asia. According to the Drivers of Migration and Urbanization in Africa report published by the UN (September 2017) , more than half of the world’s population now live in towns and cities, and that figure is projected to rise to 75% by 2050. The UN also predicts that there is an increase of about 60 million new urban dwellers each year. The UN further estimates that about 200 million people in the region will be living in slums by 2020 (UN-Habitat 2014). As urbanisation and the urban population continue to mushroom, the need to address the urgent housing challenge continues to grow.
Migration to urban areas puts pressure on existing infrastructure, basic services, and human settlement plans among other things. Households in need of housing have resorted to survival mechanisms which has increased the number of informally-built houses and contributed to the proliferation of slums across Africa’s cities. UN statistics show that slums are most prevalent in Sub Saharan Africa where about 56% of the urban dwellers live in slum conditions. The April 2018 “Meeting Challenges by Bridging Stakeholders” report by Centre for Strategic and International Studies states that cities and municipalities cannot manage urbanisation or disaster risk without first containing the expansion of these settlements. Gradually working towards breaking the cycle of building informally is a necessary step towards solving the housing problem in Africa.
In order to address the housing challenges, a number of possible approaches have been put forward. The need for integrated solutions to affordable housing problems is key. The relevant government institutions, financial institutions, developers, stakeholders and community representatives need to collaborate and discuss the unique needs and possible solutions relevant for cities. At a recent leadership conference in South Africa, Kevin Chetty from Habitat for Humanity International said that understanding and recognising the complexity of housing and moving beyond the traditional approaches to housing as a product is an essential step. He further suggests that with an understanding of the complexity, a successful people-centered integration of knowledge, financing, stakeholder mobilisation, and programme and policy interventions can be made. (Property 24, October 2018).
There is dire need for a clear understanding of the unique challenges faced by all stakeholders involved in the value chain. It is important to understand the challenges which developers in Sub Saharan Africa face, including land tenure, the availability of serviced land, excessive taxation, tedious administrative processes, and the high cost of developer funding. Perhaps this is a call to take a step back and deliberate on possible solutions to ease these challenges if ever the housing problem is to be solved soon.
Various housing strategies have been implemented over the years to ensure that the poor and middle class have access to finance for affordable housing. Unfortunately, housing subsidy programmes have barely been able to meet the rising need for housing. The 2015 World Bank report points out that most subsidy programmes are extremely costly to the government, are generally out of reach for the poor, and have not significantly increased the amount of affordable housing being delivered. Recommendations have been made that governments should rather consider reviewing the various policies and National Development Plans to set up working regulations that support affordable housing delivered by the private sector. Land tenure polices, taxation regulations, land servicing, infrastructure development, and planning regulations are some of the key areas to be focused upon, all of which would encourage greater private sector participation in low-income markets.
While there is substantial debate around mortgages, more still needs to be done to make mortgages accessible to majority of the poor and middle-class population in Sub Saharan Africa. According to the World Bank report 2015, only 15 % of adults in Sub Saharan Africa are eligible to apply for formal financing and in 2014, only 5% of adults managed to secure a mortgage loan from a formal bank. Majority of the poor and middle class are informally employed which makes it difficult for the current mortgage systems to consider their application as they would not meet the standard formal requirements of the system. More consideration, deliberation and innovation regarding lending to the informal borrowers needs to be considered. Most low-income households have resorted to self-construction and incremental housing in Sub Saharan Africa which strive more when backed by affordable housing microfinancing products. Recent case studies of the impact of Housing Microfinancing products in countries like Kenya and Uganda support the need to for more scale of such products which seem to be unlocking access to housing finance and contribute to improving the quality of houses of low-income households (KWFT Housing Microfinance Impact Evaluation Report, June 2018 ). Innovation in housing finance systems which are customized to the unique housing problems across Sub-Saharan Africa will contribute greatly to solving the current situation.
As Sub-Saharan African cities rapidly grow, and income per capita and industrial growth remain low, serious deliberations around understanding the unique and complex housing crisis must be prioritized. Productive collaboration between the politicians, private and public sectors, financial systems representatives, service providers and the community representatives is crucial. Most African cities need to reflect not only on the possible solutions to address the housing crisis but also ways of upgrading the infrastructure and improve city planning to ensure that African economies benefit from urbanisation. Appreciation of the market evolution and trends will make a difference towards breaking the shackles of poverty and addressing inequalities in Sub Saharan Africa.