Urbanization is driving demand for affordable housing in African cities. It is estimated that African cities receive up to 40,000 immigrants per day, a number that has to be housed.
This has motivated multinational investors to lay claim on the widening market for affordable housing. According to a recent IFC piece, the situation has drawn the IFC and a host of other big muscle investors into making greater commitments towards the property sector.
IFC and Chinese multinational construction and engineering company, CITIC Construction, in May launched a $300 million investment platform, CITICC (Africa) Holding Limited, to develop affordable housing in multiple African countries.
Sizing up the market, the numbers are hard to ignore. The demand for affordable housing in Kenya and Nigeria alone, currently totals 19 million units (2m and 17m respectively). With a widening gap between supply and demand, constrained financing for local developers and limitations in capacity and technology, African countries are in need of inputs from all quarters.
The IFC-CITIC consortium plans to partner with local housing developers and provide long-term capital to develop 30,000 homes over next five years, still a far cry. IFC estimates that each housing unit will create five full-time jobs, generating nearly 150,000 new jobs on the continent.
“As Sub-Saharan Africa become more urbanized, the private sector can help governments meet the critical need for housing”, said Oumar Seydi, IFC Director for Eastern and Southern Africa. “The platform will help transform Africa’s housing markets by providing high quality, affordable homes, creating jobs, and demonstrating the viability of the sector to local developers.
The new housing units will be constructed in accordance to IFC’s green building standards, delivering homes that are environmentally friendly and sustainable.