The Shelter Afrique determination to flood Nigeria with affordable homes is becoming a reality as the bank has finalised arrangement to kick off the transaction which has been described by many experts as successful.
The mock signing of its Naira denominated bond with counterparties has been scheduled for Monday 25th of April in Lagos.
For four decades, Shelter Afrique (SHAF) has been at the forefront of transforming Africa’s affordable housing conversation; but it isn’t just talk. Shelter Afrique has raised and spent millions of dollars in housing projects across Africa with the help of partners. It has acquired an enormous foothold in different African markets, including Kenya, Uganda, Rwanda, Mauritius, Madagascar, Somalia, and Burundi, over the course of its 40-year history. As it prepares to address the Nigerian housing market in particular, the organization could serve as a catalyst for a much-needed race in the affordable housing sector of Sub-Saharan Africa’s most populous country.
Capital Finance International, based in London, recently honored the company Africa’s Best Real Estate Finance Company of 2021, recognizing its commitment to the cause. Mr Andrew Chimphondah, the group’s immediate past Managing Director and Chief Executive Officer (CEO), led the organization through a renaissance, bringing the company back to profitability. Through local finance solutions and a robust network of partners, SHAF is inventing innovative methods to address Africa’s housing needs. Chimphondah joined Shelter Afrique in 2018 at a critical juncture in the organization’s history, assisting in the development of a new road to profitability. “Shelter Afrique has a 40-year track record of redefining itself to adapt to each climate it encounters,” he said. “With the unambiguous backing of the board and the excellent management team, we were able to return the institution to profitability and set it back on the path of doing what it does best, which is furthering and facilitating affordable housing across Africa.”
Despite the COVID-19 pandemic’s arrival in the first quarter of 2020, the company’s total comprehensive income increased to USD 1.85 million in 2020, up from a total comprehensive loss of US$1.26 million in 2019. This represents a 247 percent year-over-year increase. The African Development Bank, the European Investment Bank, Agence Française de Dveloppement, The KfW, West African Development Bank (BOAD), Islamic Development Bank, NCBA Bank Kenya, and Ghana International BV were also able to complete their long-awaited Debt Restructuring Agreement (DRA) with six Development Finance Institutions (DFIs) and two commercial banks.
In the previous four decades, Nigeria’s population has expanded. If Nigeria’s government does not take deliberate actions to address the problem, the UN estimates suggest that the country would have a housing deficit of 22 million dwellings by 2030. Shelter Afrique is in a unique position to address the Nigerian situation head-on, claiming that every African deserves a decent place to live.
Nigeria’s homeownership rate remains at 25%, the lowest among Sub-Saharan African countries. South Africa has a rate of 56 percent, whereas Kenya has a rate of 75 percent. This housing shortage is most noticeable in major Nigerian economic hubs like Kano, Lagos, and Ibadan, where housing demand is increasing at an alarming rate of 20% per year.
Speaking on the collaboration, former MD Chimphondah stated, “We’re excited about our partnership with REDAN, especially because it allows us to have an impact on a group we believe is best positioned to drive these projects, the developers. With this endeavour, we are helping developers across Nigeria build capacity.
“It also follows our annual general meeting in Yaounde, Cameroon, where we became the first organisation to bring together 44 housing ministers and 44 finance ministers to discuss how to address Africa’s 56 million housing shortfall. We came up with the historic Yaoundé Declaration, in which African governments, housing and finance ministers, and policymakers all vowed to improve sustainable housing delivery in Africa.”
In its 2019-2023 strategy plan, SHAF has set aside upwards of $1 billion to assist new housing developments, with the goal of raising $20 million in yearly equity capital from new and existing members, beginning in Nigeria in 2022.
Meanwhile, reacting to the efforts of Shelter Afrique to raise naira denominated bond in Nigeria , Festus Adebayo, Executive Director of Nigeria Leading Housing advocacy organization, Housing Development Advocacy Network (HDAN) has commended the new management of shelter Afrique and the board for sustaining the idea.
According to him, “this is an excellent initiative that must be supported by all stakeholders.”
He appealed to Shelter Afrique to ensure that there is an exit plan for those benefiting in the transaction.
