Countries in the West African economic and monetary union zone face a housing shortage of at least 3.5 million units, a number likely to increase as the region’s population growth ticks steadily upwards so said by World Bank Group.
On its sheet paper, it stated that compounding these already formidable problems are sky-high construction costs. Building in Africa is about three times as expensive compared to China or India. International Finance Corporation’s response to this housing shortfall is to help make affordable mortgage financing more freely available and improve access to funds needed to buy or build a home.
It indicated that as part of this strategy, international finance corporation provided an equity investment equivalent to 2 million dollar in Caisse Regionale De Refinancing Hypothecaire (CRRH), a recently founded mortgage refinancing company, to help raise its corporate governance and lending standards.
The international private sector window then allowed international finance corporation to provide 9 million dollar in local currency needed at the pricing level and longer tenor to help CRRH close a 12 year bond issue. IDA also provided a 25 million grant for housing policy reform and institution building, it added
Adding the document noted that the project has been so successful that in January 2019, international finance corporation anchored a second 15 year local currency bond in CRRH-UEMOA to support the institution’s efforts to progressively extend its bond maturity terms to 20 years by 2020.
“CRRH will help build West Africa’s capital markets by providing longer term, local currency funding that will allow banks to extend mortgage tenors, making mortgage loan repayment more affordable for low and lower-middle income individuals waning to buy homes. Each housing project is expected to create at least five direct and indirect jobs. The UEMOA zone which includes Benin, Mali, Niger, Senegal, and Togo has a young and growing population that will benefit from skilled and unskilled labor opportunities.” It remarked.
As to the written material, the project is also important for demonstrating the power of housing finance, developing regional capital markets, and delivering for clients through World Bank Group collaboration.
According to the written report, IFC now hopes to replicate this project to create affordable housing finance across Bangladesh, Rwanda and Tanzania, where homeowners can sometimes only find mortgages for up to three-year terms which making home ownership out of reach for most.
The Ethiopian Herald June 30, 2019
BY MEHARI BEYENE
