The African Development Bank last month approved its Urban Development Strategy signaling a response to the dire need to address congestion of cities in the continent. The strategy focuses on three major areas, namely infrastructure delivery, governance and private sector development.
Urban regions provide a major share of economic activity (about 55% of the GDP, on average) for countries in Africa and on average 30% of the continents population live in cities or towns, anchored by a rapid rural to urban migration. However the growth of the urban sector areas has been chaotic and has resulted in creation of slums across these cities. A report by Forbes (2006) provided by World’s most congested cities, two African cities were included in the top 3 – Cairo bearing 36,618 persons per kilometer square and Lagos bearing 20,000 persons per kilometer square. What congestion causes in the larger frame of mind includes insufficient provision of services (including transportation and infrastructure delivery).
But how does this impact on housing and housing finance?
The areas the AFDB is mainly focusing on would provide a conducive environment for the growth and development of the housing sector. Though the main focus of housing and housing finance is to provide housing, however, in order to make delivery sustainable, basic services such as good roads, electricity, transportation networks and water need to be in place. A report that is currently underway at the centre is going to focus on the interrelationship between infrastructure finance and housing finance, the report would help understand the dynamics of the overlap.
Thus, it is a step in the right direction.