Through increased investment and sustainable housing development, African Development Bank (AfDB) has helped in alleviating poverty in its regional member countries (RMCs) which includes Nigeria.
Besides providing one of the major needs of man which is shelter, housing development, more than any other economic activity, creates jobs, mostly for the poor who are engaged in various stages of construction as artisans or labourers.
AfDB leverages this a great deal in its financial system for poverty alleviation which is consistent with its overarching objective of spurring sustainable economic development and social progress that contributes to poverty reduction.
With increase in housing investment and consumption related industries and services, many jobs have been created in the housing value chain. “A minimum of five million jobs on-site and off-site jobs are created for every one million housing units developed”, revealed Emmanuel Akinwumi, Principal Private Sector Specialist at Nigeria Country Department in the AfDB Group.
What this means is that five million poor families would be able to put food on their table and pay house rents and children’s school fees because ‘enormous’ wealth has been created, assuming a daily income of N5,000 per worker per day for 18-24 months that it typically takes to deliver a housing project.
A couple of years ago, the bank approved a Senior Loan of ZAR 570 million to South Africa’s Housing Investment Partners Trust 2 (HIP2) also known as Vulumnyango Trust, to help finance affordable housing programmes in that country.
Expectation was that the loan would help improve access to long-term affordable housing finance to South Africa’s lower-middle income earners who had limited opportunities to access affordable mortgages.
Akinwunmi, who spoke at the on-going Abuja International Housing Show, pointed out that the bank also develops instruments in support of housing development finance; gives senior loans with portions deployed into residential housing such as students’ hostels, staff quarters, family homes fund, etc.
Its line of credit goes into housing construction, building materials manufacturing companies and housing infrastructure while it provides equity of up to 18.07 percent through Shelter Afrique, the Pan African Housing Fund.
The bank’s sustainable housing development so far has made positive impacts which Akinwunmi listed as economic stimulation and improved economic growth and social peace. It has also improved contribution of the housing sector to GDP which is very low at 1 percent; more so when compared to other countries like Canada, UK, USA which have double digits.
House sector stakeholders who commended the bank’s intervention, however, noted that the bank still needed to do more in Nigeria, especially for its peculiar circumstances as the continent’s most populous nation with a housing demand-supply gap estimated at 17 million units. What is missing most in the country at the moment, they said, was inclusive access to finance, lower interest and longer tenor.
Akinwunmi affirmed, but added, “there is also need for economies of scale and collaboration in infrastructure and urban development; efficient, robust and inclusive housing market and systems; improved IGR for governments at all levels and increased foreign capital inflow”.
He advised that, in dealing with the housing issues and allied challenges, “if we don’t have the institutions and systems, let’s create them; if we don’t get them right, let’s change them; if we get them right, let’s institutionalize them”.