Housing Finance in Chad
Overview
This profile is also available in French here.
To download a pdf version of the full 2023 Chad country profile, click here.
Chad’s population will reach 16,914,985 in 2021, growing 2.9% annually. Affordable urban housing is crucial with the urban population growing faster than the general population (4% per year) and reaching 4,022,553 in 2021 (1,471,115 in N’Djamena). No social housing production has met a 10-year need of 125,000 units since 2012. The huge deficit has led to the informal occupation of vulnerable areas and informal neighbourhoods without roads, water, sanitation, or electricity. Chad must also house 450 000 Sudanese, CAR, and Nigerian refugees.
COVID-19 and the Ukraine war have exacerbated the country’s difficult economic situation, resulting in negative growth (-1.2) in GNP in 2021 and increased inflation (from -5.45% in 2020 to +7.2% in 2021). Landlocked Chad imports goods. Cotton, cattle, livestock, and Arabic gum also contribute significantly to the country’s export revenue.
Chad has a national and provincial plan to manage disaster-related climate change. 11 of 23 provinces have flooded since mid-July 2022. Undrained cities flood. 341,056 people had registered for flood relief by August 2022. 18 people died in flood-related house collapses.
42% of Chad’s population is poor, making housing unaffordable. The urban population increases housing demand from 12,500 per year to 125,000 by 2025. SOPROFIM’s serviced plots cost CFA 8,000 per m2. Real estate or mortgage loans require between $300,000 and $500,000 per month.
Chad doesn’t refinance. ECOBANK, CBT, and ORABANK charge 7–11.5% on depreciable loans. 7% more lenders have emerged despite the need for property loans. Individuals represent 12.41% of all depreciable loans local banks granted in 2018. COVID-19 reduced urbanites’ purchasing power and slowed home construction. Individual mortgages are offered by the big three banks and BHT. Family self-financing is essential, despite its limitations. Microfinance institutions offer women $1,587 loans for undeveloped land with 12-month repayment periods and high interest (24% per year).
The risky market prevents investors from buying SOPROFIM’s 62 homes. Unaffordable housing fuels slum self-construction. Brick firing causes environmental damage. In terms of sustainability, construction-stabilized earth bricks (BTS) could be used to build decent housing in Chad and other developing countries.
Find out more about information on the housing finance sector of Chad, including key stakeholders, important policies, and housing affordability:
- Overview
- Access to Finance
- Affordability
- Housing Supply
- Property Markets
- Policy and Legislation
- Opportunities
- Green Applications for Affordable Housing
- Availability of Data on Housing Finance
- Websites
Each year, CAHF publishes its Housing Finance in Africa Yearbook. The profile above is from the 2023 edition, which has up-to-date profiles for 55 African countries.
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Chad
Overview
Chad faces a shortage of affordable housing to service a population estimated at 16,914,985 in 2021 and growing at 2.9% per year.[1] With an urban population that is growing faster than the general population (4% per year) [2] and which has reached 4,022,553 inhabitants in 2021 or 23.78% of the population,[3] (of which 1,471,115 people live in N’Djamena the capital),[4] affordable urban housing supply is critical. Out of a ten-year need estimated at 125,000 housing units since 2012,[5] no substantial production of social housing has been implemented for more than a decade. The result is a huge deficit, which has resulted in the informal occupation of vulnerable areas and the creation of informal neighborhoods mostly without basic infrastructure services including roads, water, sanitation and electricity. In addition, there are an estimated 450 000 refugees in Chad, escaping from ongoing conflict in Sudan, the Central African Republic and Nigeria,[6] who also need to be accommodated.
The difficult economic situation that the country has been experiencing since 2015 has led to negative growth (-1.2) in gross national product (GNP) in 2021[7] and increased inflation (from -5.45% in 2020 to +7.2% at the end of 2021)[8] accentuated by Covid-19 and the war in Ukraine. Chad as a landlocked country is dependent on imported goods. Oil provides most of the export revenue for the country (60%) while cotton, cattle, livestock and Gum Arabic also provide considerable revenue for the country.[9]
Chad had been affected by climate change, with the drying up of Lake Chad, increased desertification and land degradation.[10] In response Chad has developed a risk management and response plan for natural disasters at both the national and provincial levels to mitigate climate change risks. However, its practical implementation is not evident. The country has experienced torrential rains since mid-July 2022, which have led to widespread flooding in 11 out of the 23 provinces. Several cities without adequate drainage networks have been flooded. As of August 2022, 341,056 people have been adversely affected by the floods and have been registered for relief assistance. In addition, 18 deaths have been recorded as a result of the collapse of houses associated with the floods.[11]
The country is under military transition and faces acute financial difficulties. The problem of financing social housing is summed up in the statement of a former Secretary General of the Ministry of Land Affairs as follows: “We went in 2012 to the BEAC to negotiate financing for the Land and Real Estate Development Company (SOPROFIM). The BEAC was granted 10 billion francs and SOPROFIM should bring in 12 billion with the objective of building 125,000 social housing units by 2025. But the main difficulty lies in companies that sign contracts with the government before seeking financing with the banks, hence the delay.” [12] Curiously, this situation persists because all the agreements negotiated and signed with national and foreign investors since 2012 to the present day have not been successful, despite the building of the “samples” on reserved plots in the city center of N’Djamena.[13]
[1] World Bank Data. Chad. https://data.worldbank.org/country/chad (Accessed on 18 August 2022)
[2] World Bank Data. Chad. https://data.worldbank.org/country/chad (Accessed on 18 August 2022)
[3] World Bank Data. Chad. https://data.worldbank.org/country/chad (Accessed on 18 August 2022)
[4] World Bank (2020), Doing Business 2020, Economy Profile Chad, https://data.worldbank.org/indicator/IC.BUS.EASE.XQ?locations=TD p.3
[5] Ngarbé, F. (2012), Chad: social housing, a pious ideal| Tchadinfos.com, boutique.tchadinfos.com, (Accessed on 18 August 2022)
[6] World Bank.(2022). Overview. https://www.worldbank.org/en/country/chad/overview#1 (Accessed on 12 October 2022).
[7] International DAta 2022 Chad, CAHF excel sheet, https://data.worldbank.org/indicator/ Sp. Pop. TOTL ?rentals=TD
[8] International DAta 2022 Chad, CAHF excel sheet, https://data.worldbank.org/indicator/ Sp. Pop. TOTL ?rentals=TD
[9] World Bank (2021). Chad. Country Summary. Climate Change Knowledge Portal. https://climateknowledgeportal.worldbank.org/country/chad. (Accessed on 12 October 2022)
[10] World Bank (2021). Chad. Country Summary. Climate Change Knowledge Portal. https://climateknowledgeportal.worldbank.org/country/chad. (Accessed on 12 October 2022)
[11] https://www.alwihdainfo.com/Tchad-au-moins-341-056-sinistres-d-inondations-bilan-provisoire_a116409.html (the 25/08/2022)
[12] Ngarbé, F. (2012), Chad: social housing, a pious ideal| Tchadinfos.com, boutique.tchadinfos.com, (08/18/2022)
[13] Telephone interview with Secretary General of the MAFDUH , Tel 66 31 60 13, , N’Djaména, Chad on the 2 and 3 August 2022
Access to Finance
Chad has had an environment theoretically conducive to the financing of social housing since the development and adoption of the national housing strategy in 2012, which led to the creation of SOPROFIM (in 2014) and the Banque de l’habitat du Tchad (BHT) in 2017.[1] Unfortunately, these two key institutions are not fully operational, mainly because of the failure by the state to set up a guarantee fund. So, access to formal home loans from BHT is simply impossible.
There is no operational mortgage refinancing company in Chad. The three main banks (ECOBANK, CBT, ORABANK) which grant depreciable loans, apply interest rates ranging from 7% to 11.5%; which is high. This is why, only a 7% increase in the number of lenders has been recorded while the need for property loans is immense.[2] Similarly, mortgage rates are not falling, limiting the possibilities of mortgage loans to the point that individuals represent only 12.41% of all depreciable loans granted by all local banks in 2018. Even if there is no formal discrimination between men and women to access loans without prior authorization for women, their percentage for being able to access formal loans remains very low compared to that of men.[3]
COVID-19 has negatively impacted the pace of individual property construction because of decreasing household purchasing power or simply the loss of income of city dwellers. Apart from the three banks main banks and the BHT, there are no new institutions that offer individual housing finance opportunities. Therefore, self-financing is essential with all its limitations and implications at the level of the family economy. Women, more familiar to microfinance institutions than to formal banks, benefit from modest loans CFA 1,000,000 (US$1,587)[4] for the purchase of undeveloped land with maximum repayment periods of 12 months and high interest rates (2% per month or 24% per year).[5]
In the absence of a standardised national pricing system, each institution negotiates interest with customers on a case-by-case basis. Nevertheless, it is observed that women operating in the construction industry are rare because their companies do not enjoy preference over those of men. Technical assistance offices for applicants for credit do not exist. The availability of construction financing in Chad is difficult to assess, as the market is very limited and the institution dedicated to this activity, the BHT is not operational because of the lack of guarantee fund. Indeed, the State has not fulfilled its obligations to set up the guarantee fund for several years despite the formal announcement made in 2017 at the official opening of the BHT.[6]
[1] Telephone interview with Secretary General of the MAFDUH , Tel 66 31 60 13, , N’Djaména, Chad on the 2 and 3 August 2022
[2] Interview with Head of Central Branch of ORABANK, Ndjamena, Tel. +235 66299790 (Interview on 22 August 2022)
[3] Interview with Head of Central Branch of ORABANK, Ndjamena, Tel. +235 66299790 (Interview on 22 August 2022)
[4] Telephone interview with Secretary General of the MAFDUH , Tel 66 31 60 13, , N’Djaména, Chad on the 2 and 3 August 2022
[5] Telephone interview with SG of the Association of Microfinance Institutions of Chad Tel. +235 66 44 59 69 on 2 August 2022
[6] Interview with Ali Mahamat, Head of Central Branch of ORABANK, Ndjamena, Tel. +235 66299790 (22/08/2022)
Affordability
The demand for housing, estimated at 12,500 per year, with a target of 125,000 housing units by 2025, is growing in proportion to the growth of the urban population. However, housing remains largely unaffordable in Chad because of the number of households living below the national poverty line (42% of the population in 2018).[1] With a national unemployment rate of 1.13% in 2018 compared to that of graduates which is 14.2%, the supply of jobs is limited. Despite a Minimum Guaranteed Salary (SMIG) Decree in 2010 of CFA 60,000 (US$95.24) per month for state contract agents, housewives and security guards working in private homes earn an average of CFA 40,000 (US$63.49) net per month.[2] Junior military and police officers have salaries that have been upgraded in early 2022 to nearly CFA98,000 (US$155.55) per month. Of course, this income is not enough to claim decent housing that would cost more than CFA 12,500,000 (US$19,841) for a building of 75m2.[3]
Because of the great demand for plots of land in urban centers and land speculation maintained by brokers and land managers, access to a serviced plot is only achievable by purchase from SOPROFIM at CFA 8,000 (US$12.70) per m2. The high cost of serviced plots forces low-income residents to buy undeveloped plots and they are subject to the risk of eviction.
A monthly income of between CFA 300,000 (US$476.19) and CFA 500,000 (US$793.65) is required to be eligible for real estate or mortgage loan. This income requirement automatically limits access to a large segment of the population. The minimum rental for a mud house on the outskirts of N’Djamena costs CFA 30,000 (US$47.61) excluding services. For services, the average monthly household cost for water is CFA 3,000 (US$4.76) and subsidized gas is CFA 2,000 (US$3.2) per bottle. Thus, without substantial government subsidies, access to decent housing remains a permanent challenge for the majority of Chadians.
[1] World Bank.(2022). Overview. https://www.worldbank.org/en/country/chad/overview#1 (Accessed on 12 October 2022).
[2] Banque Mundulating, Excel table provided by cahf, API_TCD_DS2_en_excel_v2_4263525.xls – Google Sheets (Accessed on 25 August 2022)
[3] Telephone interview with Architect at N’DJaména, Tel. +235 69050201 (Interview on 3 August 2022).
Housing Supply
In urban centres, property owners are in the minority because the majority of inhabitants are informal tenants (without a written contract). The dominant type of construction consists of fired brick walls bonded to the earth mortar while for the foundation a cement mortar is used as protection. The design of housing in Chad is characterised by the cohabitation of several households in a concession where they share the courtyard, latrines, water and electricity. It can be deduced that the majority of urban dwellers rent, including female-headed households, which already accounted for 22.1% of the urban population in 2015.[1] Among these rental tenants, there is a high proportion of single women with children, who cannot buy a plot and build on it, in the current context.
Three plots sizes were urgently subdivided and allocated to the victims of the floods of 2010 and 2012, who were relocated to the Toukra district, in the 9th Arrondissement of N’Djamena. These are: 225m2, 360m2 and 450m2. In fact, several government programmes for the rapid provision of land to those evicted and from flood victims from 2008 to 2015 were started by the Commune of N’Djamena. The only programme that has achieved tangible results is that of sites A and B of the Toukra district, where serviced plots have Orders of Transfer by mutual agreement and have been paid for by the State. Thus, more than 5,000 households have benefited from plots whose sizes are equivalent to those lost in the floods. In addition, the programme initially provided a monetary subsidy for the construction of modest housing on these plots, but this step has not been implemented.[2]
The social housing construction projects launched by the President of the Republic in Gassi (2015) and Toukra (2016) have not been implemented.. A total of 132 housing units[3] (70 in the Crow’s Foot plot funded by UN Habitat and 62 in the Toukra-Mousgoun plot financed by Shelter Africa) have been provided to date. The private sector is totally absent from housing investment, because of the current unfavorable environment (generalized insecurity, persistent economic crisis, widespread corruption, administrative burden, lack of fair justice, etc.). These factors make it unfavorable to do business in Chad, and as such relegated Chad to the 182nd/190 with a score of 36.90 in the Doing Business Index.[4]
Basic infrastructure is inadequate, incomplete and poorly distributed between urban and rural areas. 74.19% of the population in urban areas had access to drinking water in 2020 in urban areas, compared to only 37.57% of the population having access in rural areas. 34.54% of the population have access to sanitation in cities compared to 12.06% of the population in rural areas.[5] Regarding electricity, a connection to a power line requires six stages that take approximately 67 days. This process reduces the rate of access to electricity at the national level to 9.6%. Not only is access difficult, electricity availability is unreliable even when connected, to the point that Chad is ranked 180th/190 with a score of 32.2/100 for electricity supply.[6]
The high cost of housing is mainly attributable to the total absence of the production of building materials, yet the natural resources to support the production locally is abundant including limestone, clay, quarry sand, stones, etc. Locally manufactured cement costs CFA 8,500 (US$13.5) delivered to the construction site, which is higher than cement prices (CFA5,000 (US$7.94)) in neighbouring countries (Sudan, Cameroon and Nigeria). For imported materials, for example, the price of 6mm concrete iron has risen from CFA 1,750 (US$2.78) to CFA 2,850 (US$4.52) and a kilogram of bricks has risen from CFA 1,000 (US$1.59) to CFA 1,250 (US$1.98). As the nearest seaport is Douala in Cameroon 2,000km away, imported materials are very expensive. The value of all materials used in the construction of a building represents CFA225,000 (US$357.14) or 75% out of CFA300,000 (US$476.20) per m2 built. In this proportion, the cost of all imported materials namely concrete irons, tiles, metal profiles, plumbing and electrical equipment and appliances, paints, formwork and structural wood, windows, locks, etc. may exceed 60% of the total building cost.[7]
The average cost of labor is estimated by construction professionals at 25% of the total construction cost, all expenses included, or CFA75,000 (US$119.05) per m2 built. The average number of employees (all categories combined) on a housing construction site of CFA30,000,000 (US$47,619.05) is 15 people, for a working time of four months.
The regulation of standards and rules in construction is implemented by the Urban Planning Department of the municipalities. They also provide approval of real estate developers and issue building permits. Despite the latest reform introduced in 2019, which does not yet apply in full in all municipalities, the duration of obtaining a building permit is 226 days and the charges inherent in its issuance are estimated at 18.8% of the total cost of the work. This explains a very low rate of registration of land titles, estimated at barely 11.44% per year.[8]
[1] Banque Mundulating, Excel table provided by CAHF, API_TCD_DS2_en_excel_v2_4263525.xls – Google Sheets (Accessed on 25 August2022)
[2] Le Tchadanthropus Web-Press (2012). Chad: From Walia to Toukra… disaster victims, these left behind testify https://www.letchadanthropus-tribune.com/tchad-de-walia-a-toukrades. (Accessed on 29 August 2022)
[3] Ngarbé, F. (2012), Chad: social housing, a pious ideal| Tchadinfos.com, boutique.tchadinfos.com, (Accessed on 18 August2022)
[4] World Bank, Doing Business 2020, Economy Profile Chad, p.3
[5] Banque Mundulating, Excel table provided by cahf, API_TCD_DS2_en_excel_v2_4263525.xls – Google Sheets (25/08/2022)
[6] World Bank, Doing Business 2020, Economy Profile Chad, p.3
[7] Face-to-face interview with the Hardware Store Barah Tel. +235 66337020 (Interview on 29 August 2022)
[8] World Bank, Doing Business 2020, Economy Profile Chad, p.3
Property Markets
The residential real estate market is not active in Chad. 9,454 land titles were issued in 2022, compared to 8,368 in 2021, bringing about a 11.44% increase. These titles are granted indiscriminately to both women and men. In fact, land tenure is supposed to be managed by the Single Window for fast and secure processing of files to reduce the delivery time, but the performance of this institution is poor in terms of results. Worse, the machines in the office that broke down in2021, have not be repaired yet.
The mechanism for registering land and real estate transactions is monitored by the Domains Service of the Ministry of Finance. However, the precise number of transactions carried out during a given period is not available. The land market in Chad is subject to uncontrollable speculation, urban and rural land grabbing by the wealthiest and a proliferation of stakeholders. The result is countless land disputes, registered in the courts.
The type of housing available that is accessible to modest incomes, is known as “bedroom-living room” with an average monthly rental of CFA 30,000(US$47.62) while the rental of a modern apartment (type F3) is in the order of CFA 300,000 (US$476.20) per month. However, there is a stabilisation of rents, probably due to the increase in supply, due to the acceleration of self-construction in the increasingly dense peripheral districts. Finally, the number of properties registered for payment of property taxes is only 9,454 as of July 2022. This poor performance is explained by the long administrative procedures and the high inherent costs.[1]
[1]Interview with Notary Agent RANDa, Phone 66 82 13 11, N’Djaména, Chad, (interview on 3 August 2022).
Policy and Legislation
The government only acts in the provision of housing through SOPROFIM, which is supposed to promote the sale of plots and social housing to qualified applicants. The State’s contribution was limited to creating an environment conducive to developers, as well as the free allocation of sites for the construction of the first series of social housing. No official subsidy is given to any housing service. Taking advantage of this state weakness, private individuals are very active in real estate and have built apartments managed by their own informal real estate agencies in N’Djamena.
The legislative and regulatory environment for affordable housing has not changed. The same is true of government policy and the legal framework, which have remained the same since 2020. However, the standards and technical requirements for green building are at the extension stage. However, landscaping (planting trees and landscaping) is now required before the issuance of the building permit. Finally, in addition to the Single Window, it is the Domains and the Cadastre that manage, each as far as it is concerned, land tenure and property rights as well as their conservation. There is not yet a digital portal accessible directly to the public.[1]
[1] Telephone interview with Secretary General of the MAFDUH, N’Djaména, Chad , Tel 66 31 60 13, (interview on 2 and 3 August 2022).
Opportunities
The ongoing military transition does not offer opportunities for the development of the housing sector. Even the 62 homes produced by SOPROFIM do not all sell, because investors are suspicious or reluctant to invest in such a risky environment. This lack of supply of affordable housing has fostered massive self-construction in slums.
The walls of most dwellings are built with fired bricks. However, the massive firing of bricks has a negative impact on the environment, marked in recent years by climate change, that could increasingly jeopardise the future if the precautionary protective measures taken are not rigorously applied. Also, in the absence of an innovative technological alternative to support the improvement of housing, self-built housing remains inadequate. The improvement and popularisation of Stabilized Earth Bricks (BTS) could be considered as a sustainable alternative in the production of decent housing in Chad like other countries.[1]
Although the role of the private sector in the construction of affordable housing is not negligible, the current socio-economic environment, characterised by widespread insecurity, ongoing bloody conflicts between farmers and herders,, extreme poverty, very high financial risks, a weak judicial system, a fragile banking network, etc., is not conducive to domestic and foreign private investment. Certainly, opportunities exist but as long as this unfavorable environment does not change, and as long as Chadian entrepreneurs do not themselves take the lead in the social housing industry, it would be difficult to convince foreign lenders to invest in the sector.
The main challenges to be addressed urgently are above all the improvement of the quality and promotion of local materials, the extension or creation of drinking water networks, urban roads, sanitation and electricity in peripheral districts to promote the self-building of homes in these areas in a planned way..
[1] Telephone interview on with Chief Operating Officer of SOPROFIM, N’Djaména, Chad, (Interview on 7 August 2022).
Green Applications for Affordable Housing
Green building standards are defined by the construction, housing and urban planning laws promulgated in 2010. The major constraint is the implementation of the implementing texts and their popularization to the public. The prerogatives to enforce these environmental standards lie with the responsible Ministry, which has not created the dedicated supervisory body in this area.
The EDGE certification system, which designates “Excellence in Design for Greater Efficiencies“, whose objective is to reduce greenhouse gas production by at least 20%, is not well known in Chad. Therefore, no particular product is available to enable households to achieve a good standard of ecological living in their homes. In short, “green” housing, including any modern product to improve the living environment, is unknown to ordinary citizens. Thus, no official supplier of green building products operates on site, nor does any local bank offer such services to customers. However, all issues related to the promotion and development of green and energy-efficient buildings are dealt with at the level of decision-makers as no developer or private company is already operational on the ground.[1]
Even though the country has other renewable energy sources (solar, wind and hydro), the source of electrical energy is exclusively thermal and therefore emits a lot of carbon. Also, the current capacity covers only 9.6% of the population. The supply of electricity is disrupted by a drop in voltage and untimely load shedding, with electricity only available three days a week. Apart from privileged households that have access to water and electricity, the majority of the population (90%) have no access to electricity at all in Chad.[2]
[1] Telephone interview Secretary General of the MAFDUH, N’Djaména, Chad, Tel 66 31 60 13, (Interview 0n 2 and 3 August 2022).
[2] World Bank, Doing Business 2020, Economy Profile Chad, p.3
Availability of Data on Housing Finance
The data sought for the directory exist but are scattered in different following services: Banks, Cadastre, Domains, Department roads of municipalities, Urban planning, Notaries. No organization is specifically dedicated to collecting specific data on housing finance, even if the Single Window were to play this role. INSEED, which is supposed to periodically collect the country’s socio-economic data, does not have the means to do so. Therefore, the challenges of access and data collection remain real-time availability, reliability, quality and completeness to which must be added the lack of full collaboration of public officials who are reluctant to provide this data despite the letters of introduction of the CAHF. Most often, the data are incomplete and scattered requiring processing before dissemination. Under the gender policy imposed in appointments to official posts, data collected by targeted surveys or national censuses are disaggregated by gender and by targets (youth and women).
For this profile, the data collected by the author have been collected thanks to the personal relationships established since 2019 including the Director of Operations of SOPROFIM, the General Secretariat of the Ministry, the Domain Advisor, the Head of ORABANK Agency. Finally, it is noted that the BEAC data, has not been updated in the last two years.
Websites
- www.soprofim.com
- www.muat.gov.com
- United Nations www.data.un.org/
- INSEED www.inseed.td
