BY SYDNEY KAWADZA
Zimbabwean-born Shelter Afrique CEO Andrew Chimphondah (AC) was recently in Harare, where the Pan-African financial institution has big plans for housing. Our senior reporter, Sydney Kawadza (SK) had a discussion with him about the future of housing in Zimbabwe. Here is how their discussion turned out….
SK: Who is Andrew Chimphondah?
AC: I am the group chief executive officer of Shelter Afrique. I was fortunate to be born in Zimbabwe and went to school at Churchill High School. I then qualified as a chartered accountant. I also did my MBA with the Aruppe University in the United Kingdom. I am blessed now to be the head of a pan-African housing institution— Shelter Afrique.
SK: How did you end up in South Africa after completing your education?
AC: I worked for Unilever, then I worked for Innscor Africa as the first finance director. And then I did a stint in Cyprus as a chief financial officer. I got an invitation to become a director for housing for Standard Bank of South Africa. I also worked for ABSA in South Africa and then also the National Housing Finance Corporation as managing executive, before becoming CEO for the Old Mutual’s housing division, which is called Housing Investment Department.
SK: Could you please tell us about Shelter Afrique and its programmes in Africa?
AC: Shelter Afrique is very unique. It’s the only Pan African institution that is focussed exclusively on the delivery of housing. We do that through lines of credit to banking institutions that are offering mortgages, and through public private partnerships with developers that want to deliver housing. We believe as an institution that the biggest challenge in Africa is affordability and as you know the shortage of housing is estimated at 56 million units at an average of US$25 000, and we need US$3 trillion. We believe strategic partnerships are only way to reduce the shortage of housing on the African continent.
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SK: Which organisations are involved in projects associated with Shelter Afrique?
AC: Shelter Afrique is owned by 45 countries in Africa. We also got financial institutions such as the African Development Bank and Africa Reinsurance Corporation among others that have authorised a share capital of US$1 billion. These institutions are providing capital into Shelter Afrique. Then in terms of debt, we have to work with developmental financial institutions to raise debt funding and we get those from the European Investment Bank, Agence Franciasse du Development, the Islamic Development Bank, the West African Development Bank and from KFW in Germany.
SK: Can you highlight some of your major projects?
AC: We have been involved in setting up Shelter Afrique projects in Nigeria and in Kenya where we are domiciled. In fact, we operate in about 25 countries in Africa. We also have been involved in financing banking institutions here in Zimbabwe. We have a long history with CBZ, we provided them with financing. With BancABC, we were the first to provide them with financing and then of course we are working with other institutions and developers. In Rwanda, we provided them with project funding and we are in the process of launching a 2 000-unit project called the Rugarama Park Estates. We are doing that as a joint venture with the Development Bank of Rwanda. We cut across all countries of Africa. We have been in existence for 40 years. We have approved projects in excess of US$1,2 billion since Shelter Afrique has been in existence.
SK: Tell us about your projects in Zimbabwe?
AC: In Zimbabwe, our shareholder is the Ministry of Housing and Social Amenities. We are pleased to advise that Honourable Daniel Garwe is not only the first vice-president, but in June 2022, he will be the president of our Annual General Meeting Bureau. We are into additional projects and programmes. The first is financing parastatals. We are working on a facility with UDICORP worth about US$10 million, we are working with CBZ for a programme worth about US$13 million, we are working on a facility with National Building Society of about US$4 million. Above that, we are working on entering into a partnership with the Government of Zimbabwe for between 3 000 and 10 000 units. We also have aspirations to set up a regional headquarters here in Zimbabwe.
SK: Tell is about the housing factory that will be established in Zimbabwe?
AC: One of the declarations that we promulgated in Yaonde, the Yaonde Declaration, was about the industrialisation of housing development, so what we want to do is to develop a factory where you actually manufacture the units so that when you now have to make a house you just assemble the house. Instead of taking three to four months constructing a house, you do it very much quicker, within a month.
SK: Then there is the issue of housing bonds, can you unpack this issue?
AC: What we are saying is that the biggest challenges facing institutions and developers are that we provide financing in US dollars and when the local currency devalues, it becomes very difficult to pay the loans. So what we are doing is we are developing local capital markets, for instance, in Nigeria, we are raising bonds in Naira, in East Africa we are raising bonds in Shilling, and in the later part of 2022, we will have discussions with the Reserve Bank of Zimbabwe to see how best we can raise local bonds, where institutions like pension funds and insurance companies can buy those bonds. The benefit is that we are now going to channel cash generated by the purchase of bonds into low-cost housing.
SK: There is a general challenge within developing countries and that is mainly the issue of mortgages and these are not even available for your targeted beneficiaries. How is Shelter Afrique working around such issues?
AC: It is true, but we need to look at innovation. Just to give a little perspective, for every 100 people that apply for mortgages, generally in Africa about five are approved. So you see, the product for a mortgage is not suitable for Africa so we are looking at providing alternative financing like incremental home loans. The other aspect is coming up with innovation with projects like buy-to-let where people come and pay rent but the rent is structured that by the end of a certain period or 10 years or so they get to own the house.
SK: Then there is the issue of funding. I understand member countries have to pay Shelter Afrique. Zimbabwe has had challenges making contributions to such programme.
AC: I am proud to say that of the 45 countries, seven countries are fully paid and Zimbabwe is one of those. Zimbabwe paid its capital arrears ahead of most countries. In terms of the quantum, total payments for the capital arrears by Zimbabwe US$2 586 671.00
SK: Zimbabwe has a backlog of 1,2 million housing units, how do you intend to assist government in reducing that backlog?
AC: I believe it’s a big backlog but what we intend to do is to work closely with the ministry of housing and social amenities to support the programmes that they are embarking on to reduce the shortage of housing. There are many aspects. We have seen the building of flats. What we are working on in terms of planning is ensuring that we bring in the financing required to deliver low cost housing. And with the shortage of land, you have to build flats as we have done in other countries. If we are able to support and finance low cost housing in a large scale we will be able to reduce the shortages and the houses become affordable.
SK: Issues of land are quite emotive in Africa and in Zimbabwe.
AC: I do agree that issues to do with land are emotive. That is a challenge throughout the continent of Africa. What we want to do is to work with the local governments to develop block chain technology where we can improve the titling of land so that we can be able to make the real estate more attractive.