Shelter Afrique Targets Kenyans, African Diaspora with Affordable Housing

Pan-African housing development financier Shelter Afrique is targeting Kenyan and African diasporas with affordable housing units.

Over 170 million Africans who reside outside of Africa represent a sizable resource pool for the development of the continent’s infrastructure, including housing, according to the company’s Managing Director (MD), Thierno-Habib Hann.

Kenya is among the African nations whose remittances have been rising as Kenyans send record amounts of money to their families.

For instance, the amount of money Kenyans sent home in January of this year increased 3.2 percent to Sh43.7 billion from Sh42.4 billion in January of 2022.

African diaspora populations are growing, as are their savings and the scale of resources available to reinvest in their countries of origin,” Hann spoke at the 25^th annual Havard Africa Business Conference in 2023.

“The World Bank estimates Africans in the diaspora save about $53bn per year and, in 2021, recorded remittances reached over $95.6bn sent to and within Africa,” the MD added.

Nigeria ($19.2 billion), Ghana ($4.5 billion), Kenya ($3.7 billion), and Senegal ($2.7 billion) are among the top 10 recipients of remittance inflows in Africa in 2021.

The Democratic Republic of the Congo ($1.3 billion), Zimbabwe ($2.0 billion), Uganda ($1.1 billion), Mali ($1.1 billion), South Africa ($900 million), and Togo ($700 million) were the other countries.

The majority of people who send money home invest it, among other things, in real estate projects, which presents an opportunity for the financier to grasp.

“We are considering tapping into the diaspora to enhance affordable housing delivery by setting up diaspora bonds for affordable housing and infrastructure development, skills transfer, and leveraging on their networks and outreach,” Hann stated.

According to UN estimates, 1.5 billion people will live in urban areas in Africa by 2050, and the continent will cross the threshold of 50% urban population around 2035.

Africa now has a housing shortage of at least 56 million units.

“This housing deficit is a significant indicator of Africa’s growing infrastructure gap, which can be attributed to lack of sufficient capital to finance the delivery of affordable housing projects, lack of bankable projects, and inefficient risk allocation mechanisms,” he said.

“This is why it’s important to incorporate the diaspora into affordable housing financing mix.”

Similar estimates from the African Development Bank place the continent’s annual infrastructure needs at $130–170 billion, with a financing gap of $68–108 billion.

Less than half of this sum has been raised so far, leaving a financial deficit of between $68 and 108 billion.