CAHF .- HOUSING FINANCE IN AFRICA

The Centre of Affordable Housing Finance in Africa (CAHF) and its Effort to Transform the Housing Market in Africa

CAHF is a think tank based in South Africa. Its focus is on growing the housing market in Africa. Although CAHF is targeting the entire African continent, it is currently involved in housing projects in eight countries, Tanzania, South Africa, Uganda, Senegal, Nigeria, Cameroon, Mozambique, Cote d’Ivoire and the DRC. 

Africa’s economic growth has largely been influenced by the demographic shift, with about 20% of the current 1.2billion population made up of young people between 15-24 years. It is estimated that this age group will increase to 64%. However, Africa’s slow transition to low mortality and low fertility has resulted in high youth dependency as, even though they are of age, it is taking the youth much longer to gain independence from their parents due to low unemployment. 

This, however, has not deterred a significant number of young people from leaving their rural dwellings for cities in search of economic relief. This has put pressure on housing in some of the major cities in African nations. Since Africa’s population is expected to double by 2050, there is an urgency in solving the current housing challenges in the continent.

Africa’s economic outlook is expected to change only if various countries adopt effective urban policies to address housing deficits. The failure to deal with the housing challenges in major African cities is the reason behind the proliferation of slums. According to a 2017 UN-Habitat report, about 61.7% of Africa’s urban dwellers, which is about 570 million people, live in slums. 

CAHF is not only committed to increasing the housing market, but it is also finding ways to make housing affordable to a vast majority of the population that is currently living in poor housing units because they cannot afford to live elsewhere. This will have a ripple effect because the housing sector is likely to stimulate various sectors of the economy. 

How CAHF works with Financing Partners

The CAHF has been in existence since 2014. Much as its target is improving housing in Africa, it is also concerned about making financing available at reasonable rates for those who need a helping hand. This is why CAHF collaborates with various funders and partners. 

CAHF’s main responsibility is to research, collect data, and carry out housing market analysis. It then avails this information to the market place. This data makes it possible for stakeholders, both in the public and private sector, to make investment and policy decisions towards affordable housing in Africa. Private investors use the information from CAHF to make investment decisions. 

The four primary responsibilities of CAHF are;

Understanding the housing market trends
Monitor performance of the housing sector
Identify innovation possibilities in housing finance
Provide support to housing finance market development

CAHF seeks to understand the housing market in the various African countries and identify those that are ready to explore new housing structures, especially those that are building its percentage of middle-class citizens in urban settings. CAHF also tries to find ways to narrow housing inequality by seeking investors willing to provide financing to households at different income levels. 

Over the past six years, CAHF has built an incredible database of partners who support its mission in Africa. They include the Africa Development Bank Group, Habitat for Humanity, Rural Housing Loan Fund (RHLF), NURCHA – Construction, Finance and Programme Management, and UKaid. 

Some of the Projects Undertaken Under CAHF

The Real Estate Investment Trusts (REITs)

Studies and market data on Real Estate Investment Trusts (REITs) in Africa, with a focus on Nigeria, Kenya, Ghana, South Africa, Tanzania, Rwanda, and Morocco. CAHF discovered that majority of housing investments in Africa comes from domestic saving or government debt.

This is unlike developed countries which depend on domestic institutional investment markets and international capital markets. Africa’s approach limits access to finding for a majority of Africans, which hampers the house delivery value chains. 

City Mark Project

This project was developed in 2018 with the aim of discovering the activity, size and performance of affordable housing in Mangaung, Cape Town, and eThekwini. This report focused on the opportunities and challenges in the housing market. CAHF also recommended the value of aligning policy with investment strategies. The City Mark project provides intelligence dashboards which make it possible for users to engage with the data at different levels. 

Urban Land Markets

This project focuses on land and how easy it is to acquire one in the housing value chain. Africans face several challenges when it comes to accessing land, especially those that are close to the necessary social amenities. The price of land is prohibitive is such areas, and this has hurt the ability of a majority of Africans to purchase land to construct their homes. 

CAHF recommends land tenure agreements, the structuring of policy in a bid to shape the lands market and using zoning to increase the probability of more people having access to affordable land for housing. This will result in better urban development which will spur economic growth. 

Housing Investment Chronicles

This project seeks to understand the relationship between household income and the impact this has on the affordability of houses. CAHF carried out household surveys in Uganda and Mozambique in 2016-2017.

The focus was low to medium income households and the challenges they face when it comes to purchasing houses. The researchers also sought to know if the various households have security to offer financial institutions in exchange for financial support for housing. 

MARIO GARCIA/ hello@mmnieto.com