The Zambia National Building Society (ZNBS) has received US$ 25 million from the African Development Bank Group (AfDB) aimed at enhancing affordable housing in Zambia.
A statement from AfDB sad that the loan is aimed at consolidating the growth of a strong affordable housing sector within Zambia.
It will also assist in reducing fiscal pressures on the Zambian government and enable ZNBS to mobilize funding from other sources, including Zambia’s capital markets.
“The intervention will enable ZNBS to expand and deepen Zambia’s housing finance sector and encourage orderly urban development for the provision of basic utilities such as water, sanitation, roads and electricity,” said AfDB.
AfDB seeks to supports investments that widen and deepen financial markets in Africa, and enable the private sector to mobilize and access long term local currency funding from local financial and debt markets.
The loan will help ZNBS in building institutional capacity and financing affordable housing in Zambia and as such improve access to long-term affordable housing finance to Zambia’s lower-middle and middle-income earners currently with limited opportunities to access financing.
According to the Centre for Affordable Housing Finance in Africa, Zambia’s housing deficit stands at more than 2 million units and is compounded by rapid population growth and continued rural to urban migration.
Low income among citizens, poor land policies and ineffective financing plans have all played to make affordable housing a nightmare.And it is a trend that replicates in other African countries that has led to the emergence of slums especially in urban centres.
“African cities are not able to keep up with the high levels of growth in urban centres; as a result, the formal process of plan-service-build-occupy is reversed into occupy-build-service-plan.
This is the source of informality we see in African cities,” says Centre for Affordable Housing Finance in Africa.
Also compunding the situation are weak institutional capacity, ineffective cost recovery and poor community attitude and high, unsustainable reliance on funding from cooperating partners.