Housing Finance in Chad
Overview
This profile is also available in French here.
To download a pdf version of the full 2021 Chad country profile, click here.
Due to a population growth rate of 2.96% in 20201 and a massive rural exodus, Chadian cities, especially the capital of N’Djamena, are characterized by a proliferation of informal settlements and shanty towns due to the anarchic occupation of non-viable spaces which are essentially unsuitable for human settlements. This has resulted in a high urbanisation rate estimated at 3.99%. In addition to this uncontrolled urbanisation, the production, promotion and financing of low-cost social housing is limited by several constraints. These include the paralysis of the Banque de l’Habitat du Tchad (BHT), the only structure dedicated to housing financing, since its opening in 2017; the financial inability of the only functional parastatal real estate agency to self-finance social housing, the Société de la Promotion Foncière et Immobilière (SOPROFIM); and the high costs of imported building materials, due to the country’s isolation and the closure of borders imposed by COVID-19.
The tragic death of the President of the Republic, followed by a military transition, has aggravated the financial risks. Finally, the floods at the end of 2020, which affected several districts of N’Djamena for almost a month, forced more than 190 000 inhabitants to take refuge in schools and empty spaces or under makeshift shelters set up in precarious spontaneous camps. These floods highlighted the high degree of precariousness of the housing of most slum dwellers, who lack basic facilities such as electricity, water, hygiene, and sanitation, resulting in severe urban informality.
Find out more about information on the housing finance sector of Chad, including key stakeholders, important policies, and housing affordability:
- Macroeconomic Overview
- Access to Finance
- Affordability
- Housing Supply
- Property Markets
- Policy and Regulation
- Opportunities
- Urban Informality
- Availability of data on housing finance
- Websites
- Additional Sources
Each year, CAHF publishes its Housing Finance in Africa Yearbook. The profile above is from the 2021 edition, which has up-to-date profiles for 55 African countries.
Download yearbook
Chad
Macroeconomic Overview
Due to a population growth rate of 2.96% in 20201 and a massive rural exodus, Chadian cities, especially the capital of N’Djamena, are characterized by a proliferation of informal settlements and shanty towns due to the anarchic occupation of non-viable spaces which are essentially unsuitable for human settlements. This has resulted in a high urbanisation rate estimated at 3.99%. In addition to this uncontrolled urbanisation, the production, promotion and financing of low-cost social housing is limited by several constraints. These include the paralysis of the Banque de l’Habitat du Tchad (BHT), the only structure dedicated to housing financing, since its opening in 2017; the financial inability of the only functional parastatal real estate agency to self-finance social housing, the Société de la Promotion Foncière et Immobilière (SOPROFIM); and the high costs of imported building materials, due to the country’s isolation and the closure of borders imposed by COVID-19.
The tragic death of the President of the Republic, followed by a military transition, has aggravated the financial risks. Finally, the floods at the end of 2020, which affected several districts of N’Djamena for almost a month, forced more than 190 000 inhabitants to take refuge in schools and empty spaces or under makeshift shelters set up in precarious spontaneous camps. These floods highlighted the high degree of precariousness of the housing of most slum dwellers, who lack basic facilities such as electricity, water, hygiene, and sanitation, resulting in severe urban informality.
Classified as a low-income country by the World Bank, Chad recorded negative economic growth of 0.89% in 2020. Owing to the fact that its economy relies heavily on oil, which has uncertain revenues, and that it has been hard hit by COVID-19, negative socio-economic effects persist. Although the inflation rate as measured by the Consumer Price Index (CPI) has remained stable in 2021, per capita GDP is down from CFA413 333 (US$730) in 2019 to CFA347 652 (US$614) in 2020. The Doing Business index score has virtually stabilised at 36.9 (2020) compared to 36.94 (2019) but the country retains its rank of 182nd out of 190 in the world.6 Similarly, a slight decline in the Human Development Index (HDI) is observed (0.398 in 2019 against 0.40 in 2020) even though Chad has not changed its rank of 187th out of 188 countries in 2020. In addition, the presidential elections of March 2021 followed by the tragic death of President Idriss Deby on 20 April 2021, have somewhat disrupted socio-economic life. Recent significant developments in housing are mainly the emergency construction of 100 decent housing units in a dozen secondary cities during the electoral campaign, entirely financed within the framework of presidential projects, and the availability of 38 housing units, the sales campaign of which was officially launched in June 2021 by SOPROFIM.
[1] SOPROFIM. Welcome to SOPROFIM – CHAD: Housing Production. Available at: https://www.bing.com/search?q=SOPROFIM+TCHAD&cvid=87d25e89f45a4cceb9e740763a64e124&FORM=ANNTA1&PC=HCTS (Accessed 17 August 2020).
[2] World Bank Group (2020). Doing Business 2020. Economy Profile Chad. https://www.doingbusiness.org/content/dam/doingBusiness/media/Annual-Reports/English/DB2020-report_web-version.pdf (Accessed 24 August 2020). Pg. 4.
[3] Al Wihda (2019). Chad: A very significant infrastructure deficit. 5 February 2019. https://www.alwihdainfo.com/alwihdainfo.com/Tchad-un-deficit-d-infrastructures-tres-prononce_a70417.html (Accessed 11 August 2020).
Access to Finance
The formal banking network, consisting of nine primary banks, has not changed since 2015. The same is true of microfinance institutions, whose number has remained at 225. Among all these financial institutions, apart from the BHT, whose real estate office remains closed, no other formal mortgage real estate financing structures are operational in Chad. Thus, self-financing of private housing remains dominant, as access to housing loans is selective due to the lack of guarantee funds. For example, only 2 060 long-term private loans (assimilated to real estate loans) were granted by the various local banks for a total amount of CFA19 088 million (US$34 055) at the end of 2018. This long-term credit activity is dominated by Société Générale du Tchad (SGT) with 25.2%, Commercial Bank Chad (CBT) with 20.4%, and Orabank Chad (OBT) with 18.9%.
The interest rates charged by these banks vary between 11% and 15% for a period not exceeding 10 years. In all cases, the lender must make a personal contribution of between 10% and 30% of the amount requested, depending on the guarantees provided. Under these conditions, all low- and middle-income households are automatically excluded and naturally fall back on certain microfinance establishments that only offer limited loan amounts (less than CFA5 000 000) (US$892) and interest rates of more than 15% for terms of 24 to 36 months. Despite the negative impact of COVID-19 on the inhabitants and the significant damage caused by the floods in 2020, no reduction in the interest rate on housing has been made, nor has any subsidy been granted to households seeking housing. On the contrary, the increased financial risks due to the pandemic on the one hand and the socio-political insecurity created by the abolition of the constitutional order since 20 April 2021 on the other are said to have caused a slowdown in financial lending.
Affordability
The Chadian government does not provide any substantial formal subsidy for real estate. Imported building materials are exorbitant, mainly because of the country’s twofold isolation: internally (a very large country with an inadequate and badly deteriorated road network) and externally (more than 2 000km from the nearest ports, such as Douala, Lagos or Khartoum). Under these conditions, it would be difficult to obtain affordable housing in Chad. The construction cost of CFA192 000/m2 (US$328.60/m2) offered by SOPROFIM in 2020 is the most affordable compared to the minimum cost of CFA250 000/m2 (US$446 m2) in the city of N’Djaména. Such a cost automatically excludes all low- and middle-income households, favouring only monthly incomes above CFA500 000 (US$892), which represent only a tiny minority of the population. Also, drawing lessons from the housing built in 2020 in Toukra Mousgoun, SOPROFIM currently requires a minimum deposit of 30% against 15% of the total cost last year before transferring the 38 F3 villas available on mortgage. Obviously, all these measures are not likely to make decent housing accessible to the large number of people whose GDP is less than CFA344 147 (US$614) per year. Finally, the free six months of water and free three months of electricity offered in 2020 by the Chadian government as mitigation measures against the impacts of pandemic have not been renewed this year, while the harmful effects of this pandemic are still perceptible.
[1] United Nations Programme for Development (2014). About Chad. www.td.undp.org/content/chad/fr/home/countryinfo.html (Accessed on 22 August 2020).
[2] Telephone interview with Mr Liman, Real Estate Agent, 15 August 2020, N’djamena, Chad.
Housing Supply
Since the subsidised transfer by the President of the Republic on an exceptional basis in 2012 of the 70 villas of the “patte d’oie” estate (villas built on the state budget with the technical support of UN-HABITAT) to university professorsresearchers (43 villas) and to the families of the martyrs (27 villas), finally, the first wave of 62 housing units are under construction since 2020 out of the 100 planned by SOPROFIM on a pilot basis with Shelter Afrique. All other government programmes, including the National Development Plan (NDP 2017- 2021), have not implemented a single social housing project. At this rate, the achievement of the 2011 Sustainable Development Goal (SDG 11) is hypothetical. The urgent needs of those affected by the floods of 2020, following the torrential rains caused by climate change, have increased the housing deficit of the inhabitants of the suburbs of N’Djaména. Indeed, the Office for the Coordination of Humanitarian Affairs for the United Nations (OCHA-UN), in a publication dated 10 September 2020, estimated that 38 000 affected households were registered. Consequently, the rehousing of these disaster victims is one of the major challenges facing the Government in 2021.
Fortunately, SOPROFIM decided to sell at low prices (CFA5 000 to CFA10 000/m2) (US$9 to US$18/m2) against CFA50 to 100 000/m2 (US$89 to US$178/m2) in the city centre for serviced plots of land to strengthen its funds and complete the additional facilities of this first housing estate of Toukra Mousgoun. This created huge demand among the population, despite the fact the prices being high for low incomes. Also, in favour of the electoral campaign, with special funds, the late President of the Republic offered a few dozen official housing units in some secondary towns in the northern zone where decent housing is rare. To date, this work has not been completed and no official data on the amount and number is available from the infrastructure and housing officials contacted.
Property Markets
A formal and organised residential real estate resale market does not exist in Chad. Rather, it can be observed that urban plots are acquired essentially by inheritance and/or direct purchase, as official allocations are uncommon. Also, obtaining land titles (LT) and other state deeds (plans, by-laws and property certificates) as well as their registration, is still a slow administrative process that can exceed 29 days for registration alone. This discourages any legal approach. The cost of registering a property represents 8.1% of the total cost invested, which ranks Chad 131st out of 188 countries worldwide. Consequently, it is only in the large cities that certain owners make the effort to obtain the decrees of transfer of freehold which are issued more quickly than land titles. For example, the total number of land titles created in Chad since independence, extracted from the land registry on 18 August 2021, is 8 368 as against 7 374 in 2020, i.e., 994 more title deeds compared to 429 more in 2020. This strong performance is attributable to the significant drop in costs with reductions of up to 50% in land taxes as well as the awareness campaign launched by the Land Registry Department.
Moreover, because of the pandemic crisis which considerably limits the arrival of expatriates, the monthly rent for a decent modern villa of 120m2 has been reduced to CFA300 000 (US$535) per month, not including water and electricity, compared to CFA500 000 (US$892) in 2019. According to the same source, there is also a tendency for the prices of plots of land in N’djamena to stabilise or even fall. The acceptance of the first 38 housing units in May 2021 out of the 62 planned by SOPROFIM, whose work started in October 2020, finally consecrates the birth of a formal real estate market. According to the Director of SOPOFRIM Operations, the advertising campaign of the mortgage sale of these available housing units was launched in June 2021 through the press and the recruitment of five advertising agents.
In Chad, the main institutions in charge of land and property issues are: the Directorate of Cadastre under the supervision of the Ministry for Land Planning, Housing Development and Urban Planning (MATDHU); the Directorate of Domains, Registrations and Stamps under the Ministry of Finance and Budget, which issues, manages and preserves all land documents; and the one-stop shop that handles the digital and automatic processing of files. Unfortunately, the one stop shop has been out of action since June 2021 due to a breakdown in the basic software, thus paralysing the entire chain of issuing land documents.
[1] Face-to-face interview with Zoukalne, P. Direction des Domaines, Enregistrements et Timbres (Directorate of Land, Registrations and Seals), 7 August 2020, N’djamena, Chad.
[2] Face-to-face interview with Zoukalne, P. Direction des Domaines, Enregistrements et Timbres, 7 August 2020, N’djamena, Chad.
Policy and Regulation
The process of putting in place legal and regulatory texts governing land and housing in Chad, which began in 2010, is not yet complete. To date, Chad has three published laws, namely Law No. 004/PR/2010 of January 7, 2010, establishing the fundamental principles applicable to construction; Law No. 006/PR/2010 of January 12, 2010, establishing the fundamental principles applicable to urban planning; and Law No. 023/PR/2010 of November, 2010, determining the fundamental principles of financing and promotion of housing. These are the legal foundations of the national policy on housing. Then followed the creation of the Société de Promotion Foncière et Immobilière (SOPOFRIM) and the Urban Housing and Development Observatory (OHDU) in 2012. Then in 2017, the Banque de l’Habitat du Tchad (BHT) was created. Finally, the creation of the National Order of Civil Engineers of Chad (ONIC-T) by Decree 1612/PR/- MATDHU/2019 of 03 October 2019 on the organisation of the profession is part of the process of improving the housing sub-sector. The ONIC-T, placed under the supervision of the Ministry of Land Affairs, Development, Urban Planning and Housing, has just been added to the system. The ONIC-T has just definitively adopted its regulatory texts, namely the Internal Regulations and the Code of Ethics of the Order on 5 December 2020.
On the other hand, the four decrees implementing the above-mentioned laws have not yet been promulgated. These are the decree determining the operating procedures of the Social Housing Promotion Fund (FPHS), a fund that will be used to finance social housing production operations; the decree determining the organisation and operating procedures of the Loan Guarantee Fund (FGP); the decree determining the organisation and operating procedures of the Interest Subsidy Fund (FBI); and the decree determining the low- and intermediate-income brackets. Similarly, draft texts aiming at reducing the numerous stages of the land acquisition procedure, including that of obtaining a building permit as well as the issuance of the order of transfer by mutual agreement or the Certificate of Ownership, are being prepared. Moreover, the paralysis of the BHT for five years (2017 to 2021) clearly reveals a structural deficiency. Finally, after more than a decade, the legislative framework for the promotion and development of decent and affordable housing is not complete despite political speeches and promises.
[1] Face-to-face interview with Mr Alaina, Y.P. General Management of MATDUH, 6 August 2020, N’djamena, Chad, referring to Law No. 023 of 24 November 2010.
[2] Circular No. 003/PR/MFB/DGM/DGSB/2020 of 10 January 2020 on Instructions relating to the application of the tax provisions of the 2020 Finance Act.
Opportunities
Despite the government’s willingness to provide social housing on the one hand and the growing need for housing on the other, foreign investors are reluctant to invest in Chad because of the current political and socio-economic climate. Indeed, the military transition which took place on 20 April 2021 for a period of 18 months has reoriented national priorities towards the organisation of an inclusive national dialogue and free and transparent elections. Thus, all the hope raised by the government’s incentive measures taken in 2020 (tax exemptions on construction materials, promise of effective implementation of the sovereignty fund in favour of the BHT and effective promulgation of the pending regulatory decrees as well as the possibilities of distributing serviced land) suddenly faded away until the end of the transition. Naturally, this period of slowing down of public investments benefits the rich real estate owners who provide all the rental housing in the country’s urban centres.
Nevertheless, as the country has a large deficit of decent housing, there are still many and varied investment opportunities. Moreover, the rehousing of the 190 000 people affected by the recent floods is certainly a great short-term opportunity for investment in real estate in Chad
Urban Informality
With a population growth rate of 2.96% and an estimated population of 16 425 859 in 2020, of which 3 863 362, or 23.52%, live in the cities, urban informality will remain chronic for a long time in view of the current socio-economic difficulties in which everything is a priority in Chad. Indeed, basic social services are weak, with a growing disparity between urban and rural areas. The most recent WHO and UNICEF estimates show that 78% of urban areas have access to drinking water, compared with only 32% in rural areas, which is less than half. Similarly, access to sanitation services is limited, with only 3% of the rural population having access to basic sanitation and 82% of the population forced to practise open defecation.
Urban informality is essentially attributable to the galloping demography and its corollary, the massive rural exodus, as well as the total absence of a coherent government urbanisation programme. This informality is characterised by the anarchic occupation of non-viable spaces unsuitable for human settlements on the one hand, and on the other hand by the inability of the public authorities to satisfy the numerous requests for plots of land. In fact, because of the difficulties of access to land in the city centre, a substantial proportion of the urban population lives in shanty towns typified by precarious and inadequate housing, and makeshift shelters without drinking water or latrines. In short, in the absence of a specific census of the population living in shanty towns, the problem of lawless urbanisation and its pressure on urban housing are obvious in Chad. This situation has worsened considerably with the recent floods, which led to the creation of several camps for disaster victims in the 7th, 9th and 10th districts of the capital, the last of which, Walia Hadjarei, had to be forcibly evacuated by the authorities in July 2021.
In addition, the government’s efforts to improve these areas in 2021 are mainly the fixing of the protective dykes in the 9th District most affected by the floods of 2020 as well as food and shelter assistance to the victims by local humanitarian organisations.
[1] Communiqué No. 127 of the National Coordination of Health Response of 21 August 2020 published on the Internet,
[2] World Health Organization (2020). Covid-19 Situation Update for WHO African Region – External Situation Report 7. 15 April 2020. Pg. 3.
Availability of data on housing finance
In Chad, the challenges of availability, reliability, quality, and completeness of statistical data persist. Given that the main sources of relevant data are the real estate companies, mainly SOPROFIM, the primary banks, INSEED, and the technical services of the Ministry of Land Affairs and the Ministry of Finance, it is still difficult to obtain reliable primary land and financial data on time and on request. In fact, these public or private administrations, especially the banks, categorically refuse to provide the data in their possession. Also, data on Chad are rather scarce on the internet and often lack verifiable sources. Furthermore, for this year, the BEAC data made available by the CAHF have not been updated.
Faced with this situation, researches must resort to personal relationships with key persons in authority to obtain information.
Websites
SOPROFIM https://www.soprofim.com/
MATDHU https:// www.muat.gov.com/
Institut National des Statistiques et des Etudes Economiques et de Développement. https://www.inseed.td.net
Presidency of the Republic of Chad https://www.presidence.td
Bank of Central African States https://www.beac.int
UN Habitat https://www.unhabitat.org
United Nations https://data.un.org/
Additional Sources
AfDB (2020). Economic Outlook 2020 Supplement Amid Covid-19
Tracking prices of major food items during Covid-19, May 2020.
Finance Law 2021 of the Republic of Chad
CAHF (2019). Yearbook 2019 on Housing Finance in Africa, A review of Africa’s
housing finance markets.
CAHF (2020). Yearbook 2020 on Housing Finance in Africa
Chad, Ministry of Economy and Development Planning (2017), National
Development Plan 2017-2021.
Zoukalné, P. (2021), Politique nationale de sécurisation foncière en milieu rural:
Une analyse critique des initiatives en cours dans le périmètre du Projet
d’Aménagement Hydro-Agricole du Barh Linia au Tchad (PAHA-BL),
Unpublished Master’s thesis, University of N’Djaména, Faculty of Human and
Social Sciences, Department of Geography
Websites
SOPROFIM https ://www.soprofim.com
MATDHU https:// www.muat.gov.com
National Institute of Statistics and Economic Studies and Development
https://www.inseed.td.net
UN Habitat https://www.unhabitat.org
United Nations https://data.un.org/
