Africa is growing through its cities. And every day, as people lock to urban centres in search of opportunity and change, the demand for housing grows. With an annual urbanisation rate of 3.5% over the past two decades, Africa’s cities are the fastest growing in the developing world. Currently, about 40% of the continent’s one billion people live in cities and towns; and it is estimated that in the next few years, some African cities will be home to as much as 85% of their country’s population. Dificult to contemplate in the abstract, these numbers have a very local feel. Africa’s cities are crowded and vibrant spaces. The residential opportunity is obvious. The observation is reinforced by the economic context. With higher peaks, and lower troughs, African markets offer a very real opportunity for global investors wanting more than traditional markets can offer. And this growth story is only just starting. Across the continent, new discoveries of oil, natural gas and minerals are promising to completely transform national balance sheets, giving policy makers a iscal conidence they only dreamed of before. This is giving rise to increasing investment in infrastructure – in transport routes and hubs, energy power stations, and telecommunications networks – which themselves stimulate all sorts of backwards and forwards linkages along the value chain. Policy makers and practitioners are working hard to expand the reach of Africa’s nascent mortgage markets. The potential opportunity in this market is signiicant and deserves increasing attention, both for the impact it will have on the housing futures of its residents, and also on economic growth prospects. Still, mortgage markets will only ever serve the minority. Investors will miss the market if they do not consider the realities of affordability across the continent and design their products accordingly. This is a clarion call to the sector: by focusing on the delivery and inancing of mortgageable housing, they are missing the bulk of the market. The opportunity lies further down the income pyramid, where the bulk of the population lives. The real challenge facing housing practitioners is building to the market. The demand for affordable housing is signiicant – all players acknowledge this – but the current average house price of about $31 000 doesn’t even begin to scratch the surface. At that price, not even a fraction of the opportunity will be realised. Investors, inanciers and developers must understand that the market is ripe for innovation that will respond to the needs and capacities of the majority. Governments are also ready for this change, and are clearly open to proposals that will address what seem like intractable problems when tackled alone. As innovation in other markets has demonstrated, it is the disruptive business model that will alter the terrain and create new opportunities for growth. In the housing sector, this is about engaging with the reality of affordability and delivering to the market. About this publication This is the fourth edition of the Housing Finance in Africa Yearbook. Since last year, we have added 5 country proiles and updated the existing 39, bringing the total to 40 country proiles and 4 regional proiles. We have sought out new data sources, and rethought our approach to the affordability triangles. We have been monitoring the news so that this Yearbook relects the mood and temperature of housing inance markets on the African continent in 2013. The Yearbook is intended to provide housing inance practitioners, investors, researchers and government oficials with a current update of practice and developments in housing inance in Africa, relecting the dynamic change and growth evident in the market. It is hoped that this Yearbook will also highlight the opportunities available for new initiatives, and help practitioners ind one another as they strive to participate in the sector. While the general aim of the Yearbook is to offer a broad overview of housing inance and housing development in Africa, special emphasis is placed on the key challenge of housing affordability and the critical need for housing products and inance that are explicitly targeted at the income proiles of the majority. This has been a desktop study. Using the CAHF’s research as baseline material, further information on more recent developments was accessed from media reports, journal articles and practitioner websites. In some cases, material was shared by local practitioners. Of course, the Yearbook is not comprehensive, neither in the scope of countries covered nor the data provided. It is intended as an introduction, with the hopes that the detail provided will whet the appetite for more. The CAHF invites readers to provide comment and share their experiences on what they are doing in housing inance in Africa. Kecia Rust Centre for Affordable Housing Finance in Africa September 2013 Contents Overview ............................................................................................................................................ 4 Explaining the indicators ............................................................................................................................................ 26 Country proiles ............................................................................................................................................ Algeria ............................................................................................................................................ 29 Angola ............................................................................................................................................ 33 Benin ............................................................................................................................................ 37 Botswana ............................................................................................................................................ 41 Burkina Faso ............................................................................................................................................ 45 Burundi ............................................................................................................................................ 49 Cameroon ............................................................................................................................................ 53 Central African Republic ............................................................................................................................................ 57 Cote D’Ivoire ............................................................................................................................................ 61 Democratic Republic of Congo ............................................................................................................................................ 65 Djibouti ............................................................................................................................................ 69 Egypt ............................................................................................................................................ 73 Ethiopia ............................................................................................................................................ 77 Gambia ............................................................................................................................................ 81 Ghana ............................................................................................................................................ 85 Kenya ............................................................................................................................................ 89 Lesotho ............................................................................................................................................ 93 Libya ............................................................................................................................................ 97 Madagascar ............................................................................................................................................ 101 Malawi ............................................................................................................................................ 105 Mali ............................................................................................................................................ 109 Mauritius ............................................................................................................................................ 113 Morocco ............................................................................................................................................ 117 Mozambique ............................................................................................................................................ 121 Namibia ............................................................................................................................................ 125 Niger ............................................................................................................................................ 129 Nigeria ............................................................................................................................................ 133 Rwanda ...........................................................................................................................................