Opening Remarks by The Hon. Minister of Housing and Urban Development, Arc. Ahmed Musa Dangiwa At The Ministerial Roundtable Themed: Innovative Financing For Housing Affordability At The SHAFDB AGM Holding At The Marriott Hotel On Wednesday June 12th In Kigali, Rwanda

Protocols

1.    Good morning, Ladies and Gentlemen.

2.    I would like to begin by thanking the Hon. Minister of Finance and Economic Planning for the Republic of Rwanda, Hon. Dr. Uzziel, for her welcoming remarks.

3.    As you are already aware, Africa faces a large and growing housing deficit. This is alongside a disturbing housing affordability crisis affecting over 80% of our populations. The causes are evident: low incomes, a challenging macroeconomic environment, and rising living costs due to high inflationary trends. 

4.    These factors make it increasingly difficult for our citizens to afford decent and quality housing. With each passing year, the affordability bar keeps getting higher. Many households that could afford housing a year ago can no longer do so because of rising cost of building material costs and static incomes.

5.    I am worried about this because I believe that for us to make impact, we must find ways to design, build and facilitate delivery of affordable houses targeting the 80% of the low and medium-income percentile of our population. 

6.    As you may be aware, before my appointment as Minister of Housing and Urban Development, I was the Managing Director of Federal Mortgage Bank of Nigeria (FMBN). During my term, we designed and financed affordable houses, including 1, 2, and 3-bedroom bungalows priced at 4, 6, and 8 million Naira respectively. When I became the Minister of Housing, the first thing I did was to set up a Technical Committee on Affordable housing design comprising Architects and built environment professionals at the Ministry. I tasked them to produce a workable organic design targetting those prices. They did a good job. However, with a 300% increase in building material costs, achieving these price points is now impossible. Now the 1, 2, and 3 bedrooms now cost an average of N8M, N12M and N16M! Meanwhile inflation has sucked out the purchasing power of potential homeowners, making the situation worse. 

7.    This is a serious crisis to housing delivery for us in Nigeria and governments across Africa. For us to move forward and move the needle, we  must have a shift in thinking and approach. We must develop a multi-dimensional strategy to solving it. While we encourage governments to drive policies to fix larger macroeconomic issues, we must also encourage innovative financing strategies to meet immediate needs. This involves creating financing frameworks to enhance individuals' capacity to own homes and lower the cost of finance required to increase supply. Striking this balance is crucial, and it is the question we need to address during this session.

8.    It is against this background that the theme of this Ministerial Roundtable—INNOVATIVE FINANCING FOR HOUSING AFFORDABILITY—is critical. 

9.    In Nigeria, we are using a blend of innovative initiatives to lower the affordability ladder. Firstly, we leverage interest-free budgetary allocations for housing, engage sub-national governments who are custodians of land to provide land free-of charge – as part of their service to their service - to deliver subsidized housing units without incorporating infrastructure. So citizens pay only for the cost of the units built not the infrastructure or land. This collaborative stakeholdger approach absorbs the cost of land, infrastructure and lowers the cost of housing units by as much as 40%.

10.    Additionally, we incorporate organic designs to further reduce the cost of entry for first time homeowners. For example, our houses are designed in such a way that a 1-bedroom house can grow into 2 and 3 bedrooms as the homeowner's income and family size increase.

11.    We have also embraced public-private partnerships (PPP) innovatively. Under PPP, we as government create an enabling environment for reputable developers to secure land and financing to build affordable homes while facilitating bankable offtaker guarantees from government owned housing institutions. Using cross subsidy, 20-30 percent of the housing units built under the PPP are dedicated and made available at subsidized rates to off-takers. For example, under our Renewed Hope Cities and Estates Programme, we signed an MoU with a Consortium of developers to deliver a 100,000 housing units under PPP comprising 1, 2, and 3 bedrooms. Using cross susidy, 20-30% of the units in each location are to be sold to beneficiaries  at subsidized rates, while the remaining are offered at commercial rates to enable the developers recoup their investments at a profit. We have also emphasized offtake options including 30-year mortgage loans at 7% interest rates, rent to own options and outright purchase. 

12.    We are also working with the Ministry of Finance and  a host of other agencies within the housing space including Family Homes Funds Limited, Ministry of Finance Incorporated, the Nigeria Mortgage Refinance Company and the Pension Funds to create a Real Estate Investment Trust. The aim of the Trust is to create a N1Trillion Naira concessional financing window for private sector developers to enable them get low cost funds that would lead to the large scale delivery of houses to Nigerians. The target is to also leverage Pension funds to provide single digit mortgage loans to beneficiaries at a scale that is larger than what we are currently doing using the Federal Mortgage Bank of Nigeria (FMBN). 

13.    What is clear for us in Nigeria and I believe for most of us, is that we must innovate. We must think differently. We must chalenge the status quo and also get our partners to factor our peculiarities in their financing models. 

14.    Traditional financing models have served us to a point. To bridge the housing deficit, we must explore and embrace new financial instruments and mechanisms tailored to our unique contexts. Microfinance, mortgage-backed securities, public-private partnerships, and digital financial services offer promising avenues. Microfinance can empower low-income families with small, manageable loans for home improvements. Mortgage-backed securities can unlock capital markets, injecting liquidity into the housing sector. Public-private partnerships can combine public oversight with private sector efficiency. Digital financial services can expand access to credit, savings, and insurance, particularly in underserved communities.

15.    However, it is also important to say that financial innovation alone is not enough. It must be accompanied by robust policy frameworks, effective regulatory environments, and transparent governance. Our goal should be to create a housing finance ecosystem that leaves no one behind.

16.    On a continental scale, I am optimistic about the potential of private sector led innovative solutions such as the Shelter Afrique Housing Solutions Fund are key in catalyzing investments in the affordable housing industry. The Housing Solution Fund is a 100 billion Naira local currency real estate investment trust authorized and registered by the Securities & Exchange Commission of Nigeria. The initiative was conceptualized alongside its development partners, with Shelter Afrique a key partner, to provide innovative market-based solution to stimulate housing demand and sustainably scale housing supply; By investing in affordable and accessible long-dated home loans offered to eligible homebuyers in partnership with participating lending institutions and pre-qualified housing developers. Further details on the fund will be presented later in this roundtable. 

17.    Engaging all stakeholders is imperative. Governments, financial institutions, developers, community organizations, and international partners must work together. We must foster an environment where ideas can be exchanged freely, best practices shared, and every stakeholder committed to the common goal of housing affordability.

18.    As we deliberate, I urge us all to think boldly and act decisively. Let us challenge conventional wisdom, explore uncharted territories, and forge new pathways to make affordable housing a reality for all Africans. Our discussions here will shape the future of housing on our continent, and it is our responsibility to ensure that this future is one of hope, opportunity, and prosperity.

Thank you.

Arc. Ahmed Musa Dangiwa  
Hon. Minister of Housing and Urban Development
 

Opening Remarks by The Hon. Minister of Housing and Urban Development, Arc. Ahmed Musa Dangiwa, Outgoing Bureau Chair of The 42nd AGM, at The 43rd Annual General Meeting of Shelter Afrique Development Bank (SHAFDB) on Tuesday 11th June 2024 Holding At The Marriott Hotel In Kigali, Rwanda

Protocols:

Esteemed Guests, Honored Delegates, and Colleagues, all protocols observed,

1.    It is my great pleasure to welcome you all to the Shelter Afrique Development Bank’s 43rd Annual General Meeting holding here in Kigali, the Capital of Rwanda. 

2.    I am especially delighted to finally see so many of you, for the first time in person. Your presence here today and in the coming days demonstrates a commitment to the growth of this bank. 

3.    ShafDB is Africa’s housing finance bank, the only such institution that we have. It is therefore important that we all continue to give the bank all the support that it requires to grow, scale in impact and deliver on its mandate. Particularly, this support, I believe, is critical to our efforts as Ministers of Housing to leverage private sector finance towards providing affordable, decent and quality housing to our people across Africa.

4.    Before I go on, I would like to on behalf of the 42nd AGM Bureau and the Management of ShafDB, sincerely thank the President of the Republic of Rwanda, His Excellency, Paul Kagame, and the Government of Rwanda for agreeing to host this 43rd AGM. The beauty, neatness and orderliness of Kigali and its hospitality is simply breathtaking. 

5.    I would also like to extend my profound gratitude to the ShafDB Board of Directors under the leadership of Dr. Chii Akporji for their support throughout my tenure as Chairperson of the 42nd AGM Bureau. With their support, we were able to accomplish great milestones and guide the bank towards a path of clarity and reform. 

6.    I must also acknowledge the exceptional efforts, drive and dynamism of our Managing Director, Thierno Habib Hann. Over the course of my time as AGM Bureau Chair, I have seen Mr. Hann demonstrate an untiring dedication, innovation and leadership that I believe is necessary to achieving the goals of a transformed ShafDB. 

7.    I want to acknowledge and commend the contributions of ShafDB management and staff. Their collective efforts contributed significantly to the successful transition from Shelter Afrique to Shelter Afrique Development Bank. To all of you, I extend my deepest appreciation.

8.    I am pleased to inform you that during the Extraordinary General Assembly in Algiers, member States overwhelmingly supported the ratification of our new statutes. This consensus is a significant milestone in our journey to establish the Shelter Afrique Development Bank. Our discussions went beyond words. We recorded concrete measures to expedite the ratification process. It is important that we foster transparent dialogue about our current state and identify additional steps to enhance our progress.

9.    Although we anticipated completing the ratification process within a few months, we find ourselves still awaiting full ratification. As of yesterday, only a few countries had ratified the Statutes. This situation poses challenges that we must quickly address. 

10.    Building robust alliances is essential for our success. I thank all member States for their financial contributions and support. I am proud to report that our Bank recorded a profit last year, a feat that was once considered impossible. 

11.    Looking ahead, it is important that we sustain and maintain a momentum of growth. I am optimistic and anticipate that the new Chair of 43rd AGM Bureau, Hon. Dr. Jimmy Gasore, possesses the capacity to effectively guide this revitalization process. 

12.    Our financial report highlights our unique assets, which position us for global success. The key question is how we can best leverage these resources to benefit our member States. On this too, I am confident that the new leadership will provide the management with the support they require to maximize impact. 

13.    During the course of the AGM, we plan to launch a Financial Caucus of African Ministers of Housing and Urban Development. I believe that this platform will help us create synergy, tap from our collective and unique strengths to fashion out innovative ways and measures to bolster housing development in our respective countries. 

14.    Like I said at the EGM in Algiers, the African housing problem is for Africa to solve. And we as Ministers of Housing must recognize that we are the ones responsible to providing the solutions and driving the process towards fixing Africa’s housing challenge. What this means is that we must work together. We must share experiences, challenges, lessons and solutions. We must combine efforts in our engagements with external stakeholders and maximize our engagements. We must seek to tap the immense benefits that come from working as a unified group towards solving the African housing problem. Working in silos is no longer an option. This is because as Africans, we are one. We have a common continent; we have a common destiny, and our progress or backwardness reflects on us all. 

15.    At the end of this AGM, we also plan to have a Kigali Declaration to signify and communicate our collective desire to Prioritize housing development and commit to taking concrete steps towards making a substantial difference. The Kigali Declaration aims to unify our voices to achieve common goals and tackle shared challenges. It seeks to highlight to the global community the urgent need for coordinated action on climate change, emphasizing its impact on Africa.  

16.    It is important to state that the Kigali Declaration will not just be words on paper. We have ensured that it is based on a well-prepared roadmap for "How to Finance and Deliver," leveraging the professional expertise around Shelter Afrique Development Bank. Our aim is to make a difference. Our aim is to create impact and build a new and more progressive narrative that delivers concrete results in terms of homes for our people, jobs and economic empowerment. And this, I believe is possible. 

17.    Importantly, with the existential threat of climate change, the housing industry serves a key lever to achieve the climate ambition and sustainability targets of the region.

18.    As we deliberate during this AGM, I implore us to always strive for compromise and ensuring a commitment to upholding the laws and statutes that hold us together. As a big organization with shareholding of over 44 independent and sovereign countries, we must all commit to staying within the boundaries of what the laws state. 

19.    Before I conclude, I want to express my gratitude to all those who continue to participate in our collaborative efforts, despite occasional disagreements about our direction. Your commitment strengthens us and propels us forward.

20.    Our achievements over the past year underscore the importance of strategic planning and building strong connections. Perseverance through challenges and setbacks is crucial. This year, we have reached several objectives we can be proud of.

21.    Despite our successes, we must remain vigilant and not rest on our laurels. New and existing challenges will continue to emerge. It is vital to sustain our current relationships and cultivate new ones.

22.    Regardless of the decisions we make, I am confident that we will make them together, as a united body.

Thank you.
Honorable Minister Arch. Ahmed Dangiwa