By Modupe Gbadeyanka
A sovereign lending product to be sold in the capital market is being designed by Shelter Afrique to provide an alternative funding source for housing projects.
Africa has a wide housing deficit, and the capital available to bridge this gap is insufficient, informing the organisation’s decision to design this innovative product to address the issue.
The company has already conducted an in-house capacity building in partnership with the African Development Bank (AfDB) ahead of the launch of the product.
In a statement, the pan-African housing development financier said this product would supplement its traditional products that attend to both the demand and supply sides of the housing value chain.
The acting Managing Director of the firm, Mr Kingsley Muwowo, said the contraction in Africa’s gross domestic product (GDP) from the COVID-19 pandemic was an alarming sign of a slump in the inclusive housing goals in many countries and thus the need by the company to respond to the risk of a possible governments’ disengagement while revitalising its financial agility.
“The COVID pandemic has brought in an era of economic distress throughout Africa with an average of, 3.6 per cent recession in 2020, the first recession in SSA in 25 years.
“In response, Shelter Afrique recently reviewed its corporate strategic plan with the aim of aligning itself to its members’ priorities and positioning the company for better performance and enhanced development impact.
“One of the results of this strategy review is the decision to develop a sovereign lending product to serve our member states,” Mr Muwowo said.
Currently, the organisation offers various products and related services, including project finance, institutional lending, equity investments & joint ventures, trade finance, and social housing, to support the delivery of affordable housing and commercial real estate.
Adedapo Adesanya