IFC and World Bank Build Momentum for Housing in West Africa
The West African Economic and Monetary Union zone faces a housing shortage estimated at 3.5 million units. It is likely to increase with population growth rates of between 2.5-3.5 percent.
Caisse Régionale de Refinancement Hypothécaire, a regional mortgage refinancing company, was recently founded to address the pressing need for affordable housing in the West African Economic and Monetary Union (UEMOA) zone. IFC is providing an equity investment of 1.25 billion CFA francs ($2 million) in CRRH.
The project is important for demonstrating the power of housing finance, developing regional capital markets, and delivering for clients through World Bank Group collaboration, among other areas.
CRRH is a regional initiative launched by the West African Development Bank (Banque Ouest Africaine de Développement, BOAD). Through CRRH credit establishments will gain access to finance and long-term resources at competitive rates for refinancing approved housing loans for their clients. CRRH’s shareholders consist of 54 commercial banks in the UEMOA zone, the BOAD, the BIDC and Shelter Afrique, an institution dedicated to the promotion and financing of housing in Africa.
The World Bank Group has been instrumental in creating momentum for a housing finance market to develop in West Africa. In addition to IFC’s support for mortgage refinancing, the World Bank is considering more comprehensive support for the sector through BOAD and CRRH.
Aliou Maiga, IFC Regional Industry Head for the Financial Institutions Group, said, “IFC’s investment in CRRH is part of a larger program to develop the housing markets in the West African region and contribute to the World Bank Group twin goals through access to home ownership and job creation. The IFC and IDA investments are expected to result in a much deeper knowledge on the housing sector and mobilization of significant funding through the regional capital markets.”
IFC’s support provides anchor financing and an advisory agreement will enable IFC to support CRRH’s goals for the region while encouraging its development.
Christian Agossa, Director-General of CRRH said, “We will mobilize more resources to increase our capacity to refinance housing loans by our shareholder banks. It’s equally an investment in the efficiency of our model of intervention.”
Each housing project is estimated to create at least five direct and indirect jobs. The UEMOA zone has a young and growing population that will benefit from opportunities to skilled and unskilled laborers.
Bassary Touré, Vice-President of the BOAD said, “Alongside BOAD, IFC becomes the second institutional shareholder to successfully provide funding to CRRH.” He highlighted the involvement of other institutions in the UEMOA zone, including the Regional Council of Public Savings and Financial Markets, known by its French acronym CREPMF, which worked with the BOAD to create the CRRH-UEMOA and is still supporting its operations.
In addition to WAEMU, IFC is engaged in the development of the housing finance markets in other countries and sub-regions (Tanzania – Post-IRM, Kenya - early, CAEMU - early), and will leverage the IDA Private Sector Window to “de-risk” and “bridge the affordability gap” where needed and justifiable.
Published in April 2017
