In order to improve the delivery of affordable housing across Africa, Shelter Afrique, a pan-African housing development funder, is focusing on the African Diaspora.
Shelter Afrique managing director Thierno-Habib Hann stated that the more than 170 million people of African descent who live throughout the world represent a sizable resource pool for the development of the continent’s infrastructure, including housing, at the 25th Annual Harvard Africa Business Conference 2023 – Africa Accelerated. Hann shared insights on creative solutions for addressing Africa’s housing deficit.
“The number of Africans living abroad is increasing, as are their savings and the amount of money they have available to reinvest in their home nations. According to estimates from the World Bank, Africans living abroad save over $53 billion annually. According to Hann, reported remittances to and from Africa were over $95.6 billion in 2021.
Nigeria ($19.2 billion), Ghana ($4.5 billion), Kenya ($3.7 billion), Senegal ($2.7 billion), Zimbabwe ($2.0 billion), Democratic Republic of Congo ($1.3 billion), Uganda ($1.1 billion), Mali ($1.1 billion), South Africa ($900 million), and Togo ($700 million) are the top ten recipients of remittance inflows in Africa in 2021.
According to World Bank figures, South Sudan, Lesotho, and Gambia are Africa’s top remittance beneficiaries as a percentage of their GDPs, with 35%, 21%, and 15% of GDP coming from remittances, respectively.
In order to improve the delivery of cheap housing, Mr. Hann stated, “We are thinking about creating diaspora bonds for affordable housing and infrastructure development, skills transfer, and leveraging on their networks and outreach.
Since 2000, diaspora bonds have been issued by five nations—Kenya, Nigeria, Ethiopia, Ghana, and Rwanda—representing an estimated four million people, or 12% of all African migrants.
In sub-Saharan Africa (SSA), it is estimated that over 60% of the urban population lives in regions that are classified as slums and informal settlements, making Africa the continent with one of the fastest expanding urban populations.
The UN predicts that by 2050, there will be 1.5 billion people living in urban areas across Africa, and that the continent will cross the 50% urban population tipping point around 2035.
This housing shortage is a critical evidence of Africa’s widening infrastructure gap, which is caused by a lack of funds to finance the construction of affordable housing projects, a dearth of bankable projects, and ineffective risk allocation methods. This is why it’s crucial to include the diaspora in the financing mix for affordable housing, according to Mr. Hann.
Africa’s infrastructure needs are estimated by the African Development Bank to be between $130 and $170 billion annually, with a finance deficit of between $68 and 108 billion. Less than half of this sum has been raised so far, leaving a financial deficit of between $68 and 108 billion.