The Role of African Governments in Promoting Affordable Housing

The Role of African Governments in Promoting Affordable Housing

The social and economic transformation agenda in Africa revolves around affordable housing. The high rate of population growth and speeding urbanization taking place across the continent have established an unprecedented need in decent and affordable shelter. By 2050, according to UN-Habitat it is projected that in Africa, the population will have doubled in the urban areas with more than 70 percent of the population increase in the informal settlements. However, given this fact, formal housing delivery has not been able to match the demand. With over 56 million housing units, the continent has an excess of more than half of the population in low and middle-income households.

Housing has always been an acknowledged basic human right by governments all over Africa but has also been noted to provide economic growth, job creation and social integration. However, there remain instrumental issues like the insufficient land supply, lack of proper infrastructure, as well as inefficient financial systems, that make large delivery unachievable. In the majority of instances, the investment in the private sector alone has not been effective in satisfying the increasing demand, especially to low-income housing. This has required a more active and organized role of the African governments in setting housing policy, mobilizing finance and partnerships.

The government can contribute to the affordable housing through more than just construction. Governments are enablers of policies, regulators, financiers and coordinators, keeping the housing market properly running and in an equitable manner. Good governance is about providing a facilitative environment that will allow participation of the private sector but safeguard the interests of the population and leave out the vulnerable.

The six dimensions that this blog covers are ways in which governments in Africa are facilitating affordable housing - in terms of policy frameworks, financing approaches, land and infrastructure management, regulatory reform, public-private partnerships, and social inclusion efforts. All dimensions indicate the challenge of strike between market forces and social justice concerns. So, it is evident that resources alone are not sufficient to support the success of the Africa affordable housing agenda, but the quality of governance, political commitment, and institutional innovativeness to steer the process are also key issues to consider.

Institutional and Policy Frameworks of Affordable Housing.

The initial pillar of government intervention in the affordable housing is the formulation of consistent policy and institutional structures. Housing policy gives the strategic direction by which governments clearly present goals, allocate resources and coordinate stakeholders. In the last twenty years, some African countries initiated extensive housing policies that tend to expand access, enhance quality, and create inclusivity.

As an illustration, the Affordable Housing Programme (AHP), one of the flagships in the Big Four Agenda, will provide 500,000 affordable housing units and spur economic development through building. Equally, the case of South Africa National Housing Code and Breaking New Ground (BNG) is one of the largest government-facilitated housing programs in the developing world, which provide millions of housing units since 1994. The National Housing Policy (2016) in Nigeria is aimed at empowering cooperatives and private developers, and other countries such as Rwanda and Ethiopia have incorporated affordable housing in their national urbanization and national industrialization strategies.

Institutional structures are also very important. The implementation and monitoring of housing programs are undertaken by dedicated ministries, housing development agencies as well as housing finance institutions. As examples, National Housing Corporation (NHC) in Tanzania and the Federal Mortgage Bank of Nigeria (FMBN) have played a significant role in organizing state-sponsored housing finance and building. Presence of specialized agencies assists in facilitation of decision making process, investment, and accountability.

Nevertheless, the success of the policy is usually based on the ability of the institutions to execute strategic plans. Lack of coordination among the ministries, technical knowledge, and bureaucracy may delay the flows. There are numerous policies which are on paper, without the resources or institutional commitment to manifest into real results.

In order to reinforce policy frameworks, governments are having to focus on the importance of data-based planning, integrated land management, and coordination across departments. This involves balancing housing policy alongside the transport, energy and city development policies. The African Union Agenda 2063 and the New Urban Agenda offer the continental directions to consider housing as a part of the wider development policies.

Governmental Financing and Fiscal Incentives.

Funding has been one of the biggest hindrances to the provision of affordable housing in Africa. Most of the urban families have too little to be able to obtain commercial mortgage finance and government budgets are limited by other priorities. This renders the government financing and fiscal inducements vital to bridging the gap in housing affordability.

Governments have a multifaceted role in housing finance: they are direct funders, enablers as well as risk mitigators. The public sector can reduce the cost of both the developers and the end-users by providing national housing funds, subsidies, and grants. As an example, in Nigeria, the National Housing Fund (NHF) enables employees to make low-interest deposits (as a small percentage of their income) to long-term mortgages. The Finance-Linked Individual Subsidy Programme (FLISP) in South Africa fills the needs of the missing middle by subsidizing the full cost of housing, and placing unsubsidized mortgages within the reach of the middle income.

The participation of the private sector is also triggered by fiscal incentives. Affordable projects can be made economical with tax concessions, importation duties not charged on construction materials, and lower development charges. The government of Kenya, as an example, provides tax incentives to developers that will set aside a section of their projects to affordable units. On the same note, Moroccan housing scheme does not tax developers any corporate tax in case they construct low cost housing.

The other issue of concern is the ability to use blended finance: the combination of the public, private, and development finance to distribute risks and increase access to capital. Governments have also collaborated with Development Finance Institutions (DFIs) in the form of concessional loans and guarantees through institutions like African Development Bank (AfDB) and Shelter Afrique. These amounts are used to boost investment by increasing credit worthiness and lowering the cost of loan repayment.

Nevertheless, challenges remain. There is poor coverage, bureaucracy and monitoring schemes in most housing financing programs. The informal sector that has the majority of the urban labor force in Africa does not often have workers covered by financial systems. To reach the goal of inclusivity, the governments will contribute to the innovative financing instruments, including micro-mortgages, rent-to-own, and digital housing savings.

African governments can abandon the direct subsidization model and adopt strategic financial support, or crowd-in on private investment, at the same time keeping the costs affordable, by reconsidering their fiscal policy. Such interventions can result in strong housing markets that cut across income groups when they are coupled with macroeconomic stability and transparency.

Land, Infrastructure, and Urban Planning

Affordable housing is based on the accessibility of good locations and infrastructure. However, in Africa, the systems of land in cities are highly unequal, fragmented and inefficient. The governments are involved in the development of land, reforming tenure systems and basic infrastructure investment to ensure that development of housing becomes viable and sustainable.

Urban land is very expensive and there is a shortage of this land. The high speed of urbanization has overvalued the cost of land, thereby moving affordable housing development to the outskirts of the city, where employment and services are not available. Governments should therefore step in with land banking, releasing the land to people and reforms on regulations that should stimulate mixed income development. Rwanda is another example of transparency and efficiency through its Land Tenure Regularization Programme that has digitalized land records and made the ownership clear.

A significant part of the housing expenses goes to infrastructure provision; roads, water, sanitation, and electricity. Affordable infrastructure which is to be implemented takes so long, or fails in place, in most cities due to infrastructural bottlenecks. Governments can facilitate this pressure by putting housing together with urban infrastructure investment plans where essential services are in place prior to the commencement of construction. The examples of South Africa and Egypt can be seen in the case of the Integrated Urban Development Framework (IUDF) and the New Urban Communities Authority (NUCA), respectively.

Proper planning of cities is also vital. Most of the African cities are still under the colonial zoning laws. These laws frequently limit high-density development or mixed-use development, thus limiting the supply of affordable housing. Planning frameworks need to be modernized by governments to promote compact and transit-oriented urbanization that is less expensive and less harmful to the environment.

Also, by enhancing land governance, i.e. by ensuring clear allocation procedures, digital maps, anti-corruption, enormous potential of public housing can be opened. They will need to form alliances with customary authorities who possess large pieces of land in most of the African states to avoid conflicts and achieve fair play.

Governments can eliminate the spatial gap between the wealthy and the impoverished, rural and urban by taking proactive land and infrastructure policies to bridge the gap. This is the movement towards equitable urbanism that will be central in getting sustainable and inclusive housing development in Africa.

Institutional Efficiency and Regulatory Reform.

One of the greatest obstacles to affordable housing provision in Africa is complicated and old regulatory structures. Prolonged approval time, duplication of mandates, and non-standardization, add to the cost and discouragement of investors of projects. Regulatory reform should thus be the priority of the governments in order to develop a more effective and transparent housing ecosystem.

This is because in most African cities, it can take months, or even years, to get the building permit due to red tape involved in the process. By making these processes simpler and more digitalized, it is possible to save a lot of time and money. As an example, the e-permit system in Rwanda gives developers an opportunity to submit building approvals online, which reduces waiting periods by more than 50 percent. On the same note, Ethiopia has simplified its construction codes to accept new materials and technology that will facilitate quicker and cheaper construction.

Governments can also be involved in setting up of clear standards of construction and certification of alternative building technologies (ABTs). In the absence of such structures, new materials that are not only innovative, but sustainable, such as bamboo, compressed earth blocks, and prefabricated panels are underutilised. Governments can achieve safety by coming up with national standards and training programs which promote innovation at the same time.

Institutional efficiency goes to the level of coordination among the national governments, the regional governments and the local governments. Disparate governance results to duplicity and inconsistency. As an example, in certain nations, the housing policy is under the jurisdiction of various ministries, which makes it hard to account. The introduction of centralized housing authorities or inter-ministerial councils would facilitate the implementation of the policy.

The idea of regulatory reform has nothing to do with deregulation only--it has to do with intelligent regulation. Governments need to balance between regulation and flexibility and quality and sustainability should not be impaired. Land deals, tender, and subsidy distribution should be transparent and accountable to ensure that the people have confidence.

Finally, even a working housing sector is built up on efficient institutions and adaptive regulations. The African governments can create a better environment in which delivering affordable housing can become quicker, cheaper, and more transparent by decreasing the level of bureaucratic friction and encouraging innovation.

Public-Private Partnerships and Cooperation Models.

With limited finances, no African government will satisfy housing demand using the government funds. PPP has hence become an inevitable tool of essentially increasing affordable housing delivery. These partnerships are based on the efficiency and investment capability of the private sector and are consistent with the public policy agenda.

PPP has numerous different forms; they are joint ventures, developer incentives, land swaps and concessional finance arrangements. In Kenya, the Affordable Housing Programme involves the government which involves the assistance of the developers of the housing units in contributing to land and agreement of offtake. In Nigeria, Family Homes Fund collaborates with individual constructors to provide subsidized houses to poor earners. In the same manner, the Social Housing Regulatory Authority (SHRA), in South Africa, has collaborated with non-profit and private organizations to bring about rental accommodation in towns.

PPPs depend on good legal framework and transparent procurement to be successful. Governments will need to offer guarantees, simplify approvals and have equitable risk-sharing deals. Investor confidence is a resultant outcome of regulatory certainty. Nevertheless, inefficiently implemented PPP will result in inefficiencies, cost increases and social exclusion.

The collaborative models are also not limited to the private sector. The collaborations with community-based organizations, cooperatives, and non-governmental organizations play an essential role in inclusive development. The sense-making processes evident in the participatory slum upgrading programs in such cities as Durban and Nairobi show that communities through empowerment can co-create the solutions of sustainable housing.

Social Inclusion and Sustainable Development Goals.

Affordable housing is not only a structural problem but also a pillar on social justice and sustainable development. The governments of the African countries have a moral and constitutional duty to make sure that every citizen irrespective of income and background is provided safe and decent shelter.

The United Nations Sustainable Development Goal 11 (SDG 11) is the goal that focuses on the urban sustainability of cities; it is called Make cities inclusive, safe, resilient, and sustainable. Governments should thus make policies more than figures by ensuring inclusivity, gender equity and greenness.

Social housing schemes, rent schemes and incremental upgrading schemes are extremely important instruments in reaching vulnerable groups. The social housing industry in South Africa, such as royalties, offers the options of renting to the households who can afford neither the RDP housing, nor the mortgages, due to a middle income of the kind. On the same note, in Ethiopia, the Integrated Housing Development Programme has not only been supplying low-cost apartments, but it has also generated jobs in the construction sector.

Policy should also be made in regards to sustainability. The reduction of the long-term costs and enhancing the quality of life can be achieved by green building and integration of renewable energy as well as climate-resilient design. Governments in the lead should lead by example with green public procurement and incentives to those developers who will embrace environment friendly technologies.

Conclusion

The contribution of African governments to affordable housing is complicated and inevitable. The state still plays a more than crucial role in the transformation of the state in terms of policy formulation, financial innovation, land reform, regulatory modernization and facilitation of partnerships in the continent. But the vision of affordable housing to all remains just a dream, and to make it a reality does not only take isolated interventions, it needs strategic consistency, institutional potential, and political determination that goes well beyond a few years.

The governments should be enablers and not providers and should create ecosystems where the private sector, community and development partners will flourish. Innovation coupled with social responsibility can help African states to transform the housing crisis into an inclusive urban growth opportunity.

After all, affordable housing is not an end to itself, it is a human right and a pillar towards sustainable development. The governments in Africa have an ability to make cities just, habitable and sustainable as it urbanizes. The dream of decent housing to every African family can become a reality through leadership with visions and concerted efforts.

Also Read: African Urbanization: Opportunities in Lagos and Nairobi