Between 14 and 16 million people in Nigeria are impacted by the lack of sufficient housing. The lack of housing in South Africa now accounts for around 3.7 million units. Despite decades of comprehensive government-subsidized housing delivery and the fact that an estimated 20% of urban households in South Africa live in informal settlements, South Africa continues to face serious challenges in providing adequate and affordable housing for a large portion of its population with low incomes. This is the case despite the fact that informal settlements are home to an estimated 20% of urban households. The current shortfall in Ghana is 1.7 million units, and the cost of bringing it up to par is anticipated to be more than US$50 billion. On the other hand, Kenya has an annual housing demand of 250,000 units, while it is projected that it only has a supply of 50,000 units.
In addition, the COVID-19 pandemic shown that having suitable shelter might be an effective first line of defence against infectious diseases. For instance, when the phrase “Stay home, save lives” became a global motto to limit COVID-19, the living circumstances of many low-income and vulnerable families who lacked a suitable place to call home suffered a significant deterioration in their quality of life.
Investors, both domestic and international, are looking for new opportunities in Africa and applying their capital not simply to growing the property sector, but also with a focus on housing that is affordable to a wider spread of the population. This is due to the fact that interest in affordable housing is at an all-time high.
It is possible that a portion of this interest is stimulated by a growing acceptance and mainstreaming of the Sustainable Development Goals, in particular Target 11, which focuses on sustainable cities and communities. Another possible explanation for this interest is that it is the result of a combination of factors.
The achievement of additional goals, such as access to fundamental services and direct access to clean water and sanitation; health and well-being; and the reduction of inequities through the asset wealth associated with dwellings, is facilitated by the provision of adequate housing. Businesses are aware of this fact, which is why they highlight their efforts to focus on the SDGs in their annual reports and shareholder presentations.
Despite this, there are still obstacles. In spite of the fact that some nations are adopting more policy regimes that are favourable, macroeconomic variables are still working to weaken access to long-term capital, placing pressure on affordability with interest rates that are unreasonably high.
In the meantime, broken value chains, which include gaps in the land titling framework, municipal capacity constraints that undermine the delivery of infrastructure, and small-scale projects that are often stalled as a result of a lack of funds, undermine the opportunity that the demand side clearly demonstrates.
Despite this, there are a growing number of areas of innovation that are beginning to make a difference, adding to the overall health of the industry as well as increased affordability.
It is of the utmost importance that we acknowledge housing as a human right. The protection of the human right to adequate housing should always take precedence above the use of housing as a commodity. This should be the case at all times. The Khaya Khanya project, which is a lightweight concrete manufacturing franchise, has one of its primary goals to be the acceleration of the construction of low-cost housing through the application of innovative building technologies such as the utilisation of lightweight polystyrene bricks. A significant portion of our efforts are concentrated on bringing awareness to the ecosystem of cheap housing in Africa, particularly among underprivileged populations who are looking to better their standard of living.
The successes and failures of these and other new housing innovations will have a significant impact on the expansion of affordable housing in Africa. Each will wrestle with the unique size and form of the demand side, as well as how this matches with the growing structure of the supply side. In the process, they will uncover individual chances that will fundamentally alter the entire opportunity in the years to come.
