The city government of Addis Ababa in Ethiopia said it had reached an agreement with a South African developer to build 500,000 affordable homes in the city, the Ethiopian News Agency reports.
The $4.2bn deal with Bloemfontein-based company, Property 2000, is for 100,000 homes a year for five years. Low-income residents will be able to buy them with low-interest mortgages with 20-year terms.
Some 650,000 people have reportedly added their names to the housing waiting list.
Adanech Abiebie, Addis Ababa’s deputy mayor, said the city was working to build over 1 million houses in the capital, and the Property 2000 deal was part of this plan, which is backed by the United Arab Emirates.
She added that the city would develop the plan using a public-private partnership, with Property 2000 providing finance for the housing and the city government the land. According to reports in the Ethiopian media, the land will be allocated near the city’s Ethio ICT Park.
Napo Eddie Modise, chairman of Property 2000, said his company would complete the homes as quickly as possible, and that 90% of the construction jobs created would go to Ethiopian workers.
Meanwhile, According to Capital Ethiopia, the number of residential houses in Ethiopia will be doubled in te coming 10 years. Ministry of Urban Development and Construction (MoUDC) has revised the 16 years old housing policy and strategy to give more options for private sector involvement in the housing scheme.
The amended strategy for affordable housing schemes that have been sent to the Council of Minister for ratification has expanded the alternatives to 12.
MesfinAssefa, State Minister for urban development and housing at MoUDC, said that the coming of real estate proclamation that has currently been sent to the Council of Ministers is said to take into account of the revised housing strategy.
He said as per the new strategy that revises the 2005 document, the public with the private sector will be involved in a housing scheme to expand for affordable housing. He added that as per MoUDC evaluation the interest of the private sector to engage in the housing scheme that is mainly dominated by the government in partnership with dwellers is very high.
“The government share on providing housing under the existing experience will shrink and transfer for the direct involvement of the public and the private sector with different new technologies will embark,” he explained.
“Housing problems shall be significantly resolved when the strategy gets a green light by the top leadership and finalized to become effective,” he told Capital.
The strategy has added more alternatives from the previous eight housing schemes. “The drafted strategy has put 12 housing alternatives and mainly focuses on the private sector involvement in different arrangements,” Mesfin says, adding, “amending the strategy is crucial since the government could not continue as a major actor on the sector due to that mostly public-private partnership (PPP) modalities, joint venture, real estate development, cooperatives and mixed-use are the alternatives that is expected to magnify the involvement of the private sector and the general public in the sector development.”
Pre-feasibility and feasibility studies on six sites have already been conducted for PPP modalities in collaboration with Federal Housing Corporation.
For the real estate development and marketing proclamation, the ministry has taken several years and discussed in detail with the public and relevant offices.
The strategy has also been assessing the source of funds. According to MoUDC as per the study conducted in this budget year, there is one million residential house demands in the capital and which will be 4.4 million in the coming ten years across the country. The government has targeted to attain at least 80 percent in this decade from the current about 60 percent.
Mesfin explained as per the projection every year 471,000 houses is supposed to be constructed including rural areas and in the coming 5 years, 486,000 every year in the second five-year period, “the construction will be carried out by all partners including individual residents, developers or the government.”
In the coming ten years MoUDC targets to see the construction of 4.4 million houses all over the country that will double the exit figure.
Ethiopia is the second-most populous and the fifth least urbanized country in Africa. At present, 21 percent of Ethiopia’s 112million residents live in urban areas (23.5 million people), according to the national definition, its significantly below the Sub Saharan average of 40.4 percent. There are over 950 towns and cities in the country.
According to figures from MoUDC, currently, in the country, there are over four million houses in the country, but 30 percent are sub-standard and 74 percent of them should need crucial renovation.