The Economist explains

The housing ladder remains out of reach for many

 

ETHIOPIA’S flagship social-housing programme is probably the most ambitious in Africa. But for most locals the houses are still barely affordable. The poor cannot afford the down payment for even the most subsidised units. And those who can often struggle to meet repayments, opting instead to rent out the houses and move elsewhere. In this respect, though, Ethiopia is hardly alone in Africa.

Take Angola, where a recent $3.5bn social-housing project on the outskirts of Luanda, the capital, offered apartments from $84,000, in a country where incomes per person are just over $4,000. Or Cameroon, where the government’s social-housing scheme is out of reach to 80% of the population, according to the World Bank. In Ethiopia the state has spent over a decade building cheap homes on an almost unprecedented scale, but supply still fails to match demand. Why?

High costs and expanding populations mostly put an end to the kind of government housing provision that was common in much of Africa during the early post-colonial years. With its state provision, Ethiopia is an outlier. The majority of countries rely instead on a subsidised private sector to deliver cheap homes. But across the continent governments and builders are hobbled by the wider construction industry. This is often underdeveloped and uncompetitive, constrained by poor infrastructure and a lack of both skilled labour and cheap materials. Cement in Africa is typically around three times the world price. Construction can be painfully slow. The largest house-building firm in Ghana claims to have finished a mere 3,500 units in the past decade.

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