Shelter Afrique Development Bank: Govt to increase shareholding to 5pc

The Government says it is seeking to increase its shareholding in Shelter Afrique Development Bank (ShafDB), a Pan-African institution to 5 percent from the current 1,6 percent to allow private sector to increase the amounts of credit lines they secure from the institution.

This comes as the Pan-African institution has extended US$15 million to CBZ Holdings to finance the construction of residential housing units and mortgage origination.

The Pan-African institution is solely dedicated to financing and promoting housing, urban and related infrastructure development across the African continent.

ShafDB operates through a partnership involving 44 African governments, including Zimbabwe, as well as the African Development Bank (AfDB) and the Africa Reinsurance Corporation (Africa-Re).

Engineer Theodius Chinyanga, the Permanent Secretary for the Ministry of National Housing and Social Amenities at the signing ceremony in Harare yesterday, said the US$15 million should go towards the development of new houses in order to reduce the housing deficit.

“We are appealing to our financial sector because we intend to increase our shareholding from the current 1,6 percent to 5 percent, which will also increase probable amounts that the private sector will access from Shelter Afrique,” he said.

“We cannot do that without you because we also want you to reap from where you also sow. We have put the initial seed, lets help each other to grow the shareholding,” he said.

Chinyanga said the Government’s concern is that the funds are applied on new housing development, opposed to renovations.

“This means changing the same jacket every time and this has not solved the problem of housing that we intend to address,” he said.

He also appealed to banks to have a change of mindset like every Zimbabwean wants a piece of land.

“We are now eating into agriculture land and we will end up being a hungry housed nation, hence we are encouraging stakeholders, housing institutions to try and go up, that is why we changed the policy on land planning to say 40 percent of that land is reserved for high rises,” said Chinyanga.

Speaking at the signing ceremony Shelter Afrique chief business officer for investment and advisory services, Gibson Mapfidza, said this facility is not a new relationship with CBZ, but this started in 2012 when the institution advanced a facility of US$12 million and US$8 million in 2014.

“We have confidence in the relationship; that is why we are continuing to build on that relationship.

What we have seen in other countries is that you advance a facility but the houses you do not see them; that is why we are here because CBZ has a track record in terms of financing affordable housing,” he
said.

Mapfidza said the Pan African institution is going through a transformation phase and has classified the products into four verticals.

The first one is called the financial institution group, which focuses on the demand side of housing, where we advance a line of credit to banks so that they can issue out mortgages.

“So mainly its around mortgage financing, microfinancing and in other certain countries, we work with Real Estate Investment Trusts (REITS) to advance mortgages.

“Fig is after realising that the traditional view around housing is to say if we focus on the supply side being developers, contractors, they deliver houses that will be absorbed in the market.

“We are realising that in Africa, for us to resolve the 52 million housing deficit across Africa and the 1,5 million in Zimbabwe, we need to intervene on the demand and supply sides,” said Mapfidza.

He said the second pillar is the Project Financing Group (PFG), which focuses on direct financing to developers, contractors and also trade financing.

“We are engaging across SADC to finance the import component, as most countries within SADC import finished goods mainly from South Africa. So, our focus is to finance that as trade finance,” he said.

The third vertical pillar is the triple P, or sovereign funding. He said as the institution is owned by 44 member countries and the African Development Bank (AfDB) and Afra Re, the member states expect Shelter Africa as a company they own to also intervene directly with them.

“So, we do triple P’s in terms of structuring, mobilising financing and also put catalytic funding for the project to take off,” he said.

The last vertical, fund management, focuses on offshore investors who want to invest in housing in Africa due to the deficit.

“In Africa, we have a huge diaspora market; we also do road shows to capture that market and work with local banks to implement housing projects,” said Mapfidza.

CBZ Holdings group chief executive officer, Lawrence Nyazema, said the additional financial infusion will further strengthen CBZ Bank’s position in the housing sector and contribute to the bank’s sustained growth and development.

“CBZ Bank has enjoyed an excellent working relationship with Shelter-Afrique Development Bank since 2012, when the bank signed the first line of credit.

“We are happy to partner again and look forward to a longer-term relationship,” he said.

He added that the bank’s core focus remains on sourcing much-needed lines of credit to support the productive sectors of our economy, such as the housing sector, and this will go a long way in easing the liquidity challenges.

According to Nyazema, the US$15 million will be used to deliver 3 000 housing units, and there is a project already ongoing in Ruwa.

“The Ruwa one has already started, and what we need to ensure is to provide the right infrastructure. It is a low to medium housing density, and we do not want to deploy it only in Harare but across the country,” he said.-ebsinessweekl