Download the full conference agenda. (pdf)

The Bank of Tanzania, African Union, World Bank and others met last week to discuss ways to expand growth opportunities for the domestic housing market. Housing options in Tanzania are frequently limited and unaffordable, so the two-day conference in Dar es Salaam focused on long-term investments to expand the housing supply and development of financial markets and products that would put homes within reach of middle- and low-income households.

The conference, entitled “Growing Housing Opportunities in Africa: Encouraging Investment/ Growing the Market”, attracted over 300 delegates from 20 countries, and included a keynote address by Paul Collier, author of the critically acclaimed book “The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It”.

“The conference, held October 8-10, 2012, showcased the advances Tanzania has made in the area of housing finance in the past year and a half”, said Nozomi Mizuno, Financial Sector Specialist from FPD- Africa region and TTL of the Tanzania Housing Finance Project. “This includes the establishment of the Tanzania Mortgage Refinance Company, the first mortgage liquidity facility in an IDA country, which has already refinanced $2.6 million.”

Though Tanzania has made great strides recently, significant challenges still remain. They mostly stem from rapid urbanization, infrastructure issues, provision of long term finance, supply of affordable housing and property/title registration. Only 3% of the population in Sub-Saharan Africa currently have income levels adequate to qualify for mortgages, which often come with interest rates as high as 15%.

Michel Noel, manager of the Non-Bank Financial Institutions Service Line of the Capital Markets Practice, opened the conference,  together with the Deputy Governor of Bank of Tanzania, Deputy Minister of Housing for Tanzania, and the Chairman of the African Union for Housing Finance,

 “The continued growth of the global population,” Noel said, “together with increasing urbanization – especially in Africa – will put tremendous pressure on current housing delivery systems, which are often informal or reliant on the state.” Noel cited a U.N. projection that by 2030, there will be a need for 350 million new homes.

“A chronic shortage of affordable housing intensifies the plight of the poor in all the world’s major cities,” he said, noting that it is imperative that developing economies invest long-term capital into housing in order to achieve the housing investment rates of 5-15% of GDP that developed economies have.

The Government of Tanzania is pursuing a policy of tackling the housing shortfall by working in partnership with the private sector and through the National Housing Corporation to stimulate the supply of housing and access to finance for borrowers. It has also recently passed new legislation concerning mortgages and condominiums. The National Housing Corporation has been given a new mandate with fresh commercially aware management. A brand new corporation has been established to help banks make long term loans.

New mortgage regulations have come into force to help protect financial markets and provide consumers with confidence when borrowing. The Ministry of Lands, Housing and Urban Development and the Bank of Tanzania are working together in a unique partnership with the World Bank addressing housing supply and demand side issues.

Simon Walley, coordinator of the FPD’s Housing Finance Program, opened the second day of the conference with a presentation on the importance of housing finance in deepening the financial sector and creating jobs.

Walley highlighted the World Bank’s Tanzania Housing Finance Project that aims to expand access to affordable housing finance under market based conditions. The project has been effective since January 2011, and is comprised of three core components: development of the mortgage market, development of housing microfinance, and expansion of affordable housing supply

The Bank is also actively engaged in similar housing finance work in Nigeria, Rwanda, Kenya, Ghana, the WAEMU region and soon also the CEMAC region.