Gabon accelerate steps to build social housing units

With general elections scheduled for late August, the government of Gabon is looking to accelerate progress on building social housing units to narrow the country’s sizeable housing gap.

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Gabon moves to solve housing deficit
Spining

The level of urbanisation in Gabon – the highest in Africa at 86.9% in 2014 – has outpaced residential real estate development, resulting in an estimated housing deficit of around 200,000 units, including 160,000 in Libreville alone.

Gabon moves to solve housing deficit
Gabon moves to solve housing deficit

In response, President Ali Bongo Ondimba’s administration has declared housing a key priority in terms of capital spending, pledging to construct some 35,000 affordable homes over seven years, although the roll out of new housing stock has faced delays.
Making housing more affordable

In late January the Ministry of Housing, Urban Planning and Land Registry conducted a housing lottery, awarding 872 social housing units for rent to low-income families in Angondjé, north of Libreville.

The project was fully financed by the state, with the National Agency for Public Infrastructure Works acting in an advisory capacity, and the number of prospective tenants exceeded the number of available units nearly four-fold, with 3000 applications submitted.

The units, which were prefabricated in Turkey, were a mix of one-, two- and three-bedroom houses, as well as three-room apartments and duplexes, priced on a sliding scale of between CFA35,000 (€53) and CFA190,000 (€290) per month.

The allotment forms part of the Alhambra programme, a redevelopment project in Angondjé being carried out by the National Agency for Social Housing (Société National de Logements Sociaux, SNLS), which aims to develop a variety of subsidised and affordable housing in the area for a total of 13,700 units.

Importantly, applicants do not need access to bank financing to take part in the programme. They can qualify on the basis of earning between CFA150,000 (€230) – the minimum wage – and CFA600,000 (€915) per month, depending on the size of the unit.
Public funding

To reduce the housing shortage, the government promised to build 5000 houses each year starting in 2009. Since then, however, the number of units produced has fallen significantly behind target.

Obstacles to expanding low-income housing are similar to those found in other markets across Africa. In some cases, private developers are limited by delays in government projects to build access roads and provide utility connections.

While some progress has been made on developing new units, funding for supporting infrastructure, such as utilities, has also come under pressure, according to Paul Mapessi, managing director of the SNLS.

“In some areas where developments were around 90% complete, developers needed to slow down, as utilities were not yet in place to service these homes,” he told OBG.

A decrease in government funding has impacted public capital expenditures, with lower hydrocarbons revenues tightening the public purse strings. The country’s fiscal balance swung from a surplus of 2.5% of GDP in 2014 to a 2.3% deficit last year, while the public debt rose above the self-imposed ceiling of 35% of GDP, according to the IMF.
Attracting international investment

To help bridge the gap, the government is increasingly exploring partnerships with international investors to create much-needed residential housing stock.

According to local media reports, the administration is in discussions with China’s Guangdong-Yihua to build around 1000 homes in Bambouchine, a neighbourhood in Libreville, with a focus on using locally sourced wood in their construction.

The SNLS is building another 2000 three-bedroom villas in Bikélé, in the commune of Ntoum, with per-unit costs ranging from CFA23m (€35,000) to CFA42m (€64,000). Some 40 units are expected to be made available in the coming months.

The housing developments are being financed through a partnership between the SNLS, the Union Gabonaise de Banque and Banque Internationale pour le Commerce et l’Industrie du Gabon, which offer subsidised home loans.

These two banks will help new owners access bank credit at a maximum interest rate of 10% and a maturity of up to 15 years. While the banks have yet to extend credit on a full 15-year basis, they have offered 12-year financing terms and interest rates of as low as 8% in some cases.

“In an effort to lower costs, the government will also provide free land titles for social housing projects, as well as several fiscal incentives to construction companies,” Désiré Guedon, minister of urbanism and housing, told OBG.
Residential housing costs

While reforms on land titles, via the relatively new Agency for Urban Planning, Topographical Works and Land Registry, are currently under way and should make it easier for Gabonese citizens to take out mortgages – as land titles are often demanded as collateral by banks – the shortage of residential units has put upward pressure on prices in recent years.

“The single window system put in place by the ANUTTC has reduced delays for receipt of a land title from five years to 180 days on parcels not owned by the state,” Guedon told OBG. “For parcels that are state owned, it is down to two weeks.”

The cost of basic residential units in Libreville rose from around CFA200,000 (€305) per sq metre in 2010 to the current CFA300,000 (€460), while higher-end units are currently priced at between CFA600,000 (€915) and CFA1m (€1525) per sq metre.

Source: Oxford Business Group

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