Africa’s Housing Crisis Deepens As Developers Including Omoh Homes Seek To Scale Solutions
It is estimated every single day; more than 1,000 people are added to Kinshasa’s population. The Democratic Republic of Congo capital has been the fastest-growing major city in Africa of the 21st century. Statistics indicate that these population has swollen from just over 6m inhabitants in 2000 to more than 14m in 2020, which is an average increase of 410,000 every year.
According to the African Cities Research Consortium, this level of rapid – and often unplanned – growth is placing a huge strain on Africa’s cities with decent and affordable housing being in desperately short supply. The United Nations estimates that 230m people in sub-Saharan Africa are living in what it defines as “slum households” – roughly half the continent’s urban population.
For a problem so large, Africa’s housing crisis receives remarkably little attention. “Everyone talks about infrastructure, and we feel like no-one talks about housing,” laments Kecia Rust, executive director of the Centre for Affordable Housing Finance in Africa, a Johannesburg-based think tank.
Nicholus Okach, who leads Omoh Homes based in Nairobi, says that housing “has been a challenging area for private sector players,” partly because of their difficulties in accessing finance. However, he notes that the crisis also represents an opportunity for developers and their investors to benefit from the continent’s urbanisation.
“What Omoh Homes has as an option in this market is we will also be launching a financing arm for all the affordable housing projects under the One Member One House project initiative,’’ said Nicholus Okach, CEO Omoh Homes.
The Omoh Fund is said to comprise of a vast pool of investors drawn from private equity firms, venture capitalists, angel investors, institutional investors, and accredited investors who are keen on real estate investments across Africa, especially in the affordable housing sector.
“Population growth will drive the development of more big cities within Africa and thus the demand for more affordable, sustainable and safe housing,” he says.
Moreover, financing for homeowners is only one part of the puzzle. “You need construction finance, you need end-user finance, and you probably need infrastructure finance to wrap around it. And the availability of each one depends on the other,” Rust explains.
It is not easy to get all of these pieces to fall into place. “Our industry has got a really bad reputation,” says Horsey. Real estate developers often have trouble repaying loans. An alarming 24% of loan values in the Kenyan building and construction sectors were classed as non-performing in March 2023, according to Central Bank of Kenya data. The non-performing loan ratio in the real estate sector stood at 18%.
