Category: news-room

Emmanuel Addeh in Abuja

The federal government has increased its stake in pan-African housing development financier, Shelter Afrique with about $3.003 billion or $7.15 million in additional capital subscription.

The additional capital subscription at conservative official dollar/naira of N420 to $1, places Nigeria just one per cent  behind top shareholder,  Kenya, a news medium based in the East African country, busiweek, stated yesterday.

Shelter Afrique, headquartered in Kenya, says it’s the only pan-African finance institution that exclusively supports the development of housing and urban development in Africa.

The organisation is a partnership of 44 African governments, the African Development Bank (AfDB) and the Africa Reinsurance Corporation (Africa-Re).
Added to Nigeria’s new payment, the company also received more capital subscriptions from Swaziland and Burkina Faso.

The increase in stake now takes Nigeria’s shareholding to 15.8 per cent, one-percentage point behind top shareholder Kenya, which currently stands at 16.85 per cent.

The other top three shareholders of Shelter Afrique whose shareholdings have now changed include AfDB, which now stands at 12.16 per cent, down from 12.71  per cent; Mali at 5.3 per cent, down from 5.54 per cent; and Ghana at 5.05 per cent, down from 5.28 per cent.

Acting Managing Director and Chief Finance Officer of the organisation, Kingsley Muwowo, was quoted to have lauded the government of Nigeria for its show of confidence in the institution.

He said the move now places Nigeria in a good position to become the largest shareholder in Shelter Afrique when the country fully meets its capital commitment.
“We are grateful to the government of Nigerian for their continued support and the importance they have placed on affordable housing.

“We are especially grateful to the Honourable Minister for Works and Housing Babatunde Fashola, Honorable Minister for State, Engineer Abubakar Aliyu, and Honorable Minister for Finance Dr. Zainab Shamsuna Ahmed, for their long-term support and for honouring this significant payment. “Additionally, we appreciate Nigeria’s active shareholder and board participation,” Mr. Muwowo was quoted to have said.  

The relationship between Nigeria and Shelter Afrique has been growing in recent years. In September 2020, the institution received $9.4 million additional capital subscription from Nigeria.

Other countries that have so far ramped up capital subscription in the Pan-African housing development financier in 2022 are Swaziland and Burkina Faso which paid $317,854.54 and $34,610.00 respectively, for additional stakes.
“So far, we have received $7,504,295.45 in additional capital from member states within the last six months of 2022.

“We are grateful to our shareholders for this much needed capital injection which will go a long way in strengthening the capital structure of the company to support the ongoing fund-raising efforts to raise additional debt capital required to support project pipeline which now stands at $1 billion across 44 member countries,” Mr. Muwowo said.

Shelter Afrique recently completed a debut N46 billion ($110.7 million) Series 1 fixed rate senior unsecured bond issuance in Nigeria’s capital market under its N200 billion (US$481.3 million) bond issuance programme for housing and urban development in Nigeria.

“We are grateful to our shareholders for this much needed capital injection which will go a long way in strengthening the capital structure of the company to support the ongoing fund-raising efforts to raise additional debt capital required to support project pipeline which now stands at $1 billion across 44 member countries,” Mr. Muwowo said.

Shelter Afrique recently completed a debut N46 billion ($110.7 million) Series 1 fixed rate senior unsecured bond issuance in Nigeria’s capital market under its N200 billion (US$481.3 million) bond issuance programme for housing and urban development in Nigeria.

The company plans similar bond issuance in East African markets including Kenya, Uganda, Tanzania and Rwanda.Earlier in the year, the firm announced that it was in the middle of a restructuring programme aimed at lifting the institution from a financial abyss, leading to the sack of its erstwhile chief executive, Zimbabwean national Andrew Chimphondah, whose contract was scheduled to have run until 2024 from September 2018.

The exit of Chimphondah from the business followed a board decision that appointed its  Chief Finance Officer, Muwowo, to take over the position in an acting capacity, pending the recruitment of a substantive managing director.

Shelter Afrique fell into the loss making territory in 2015 following alleged years of mismanagement that led to the ouster of the former Managing Director, James Mugerwa, over allegations of financial impropriety and governance issues.

Shelter Afrique’s debut ₦46 billion bond issuance in Nigeria’s capital market oversubscribed by 60.7%, reflecting strong investor appetite  

Abuja, Nigeria – 25 April 2022

The Company for Habitat and Housing in Africa (Shelter Afrique), the pan-African development finance institution exclusively dedicated to housing finance in Africa, is pleased to announce the successful completion of its debut ₦46 billion (US$110.7 million) Series 1 Fixed Rate Senior Unsecured Bond Issuance in Nigeria’s capital market under its ₦200 billion (US$481.3 million) bond issuance programme.

The dual tranche bond issuance was 60.7% oversubscribed with the order book peaking at ₦64.3 billion (US$154.6 million), enabling Shelter Afrique to exercise the ‘green shoe’ option and raise an additional ₦6 billion (US$14.4 million) more than the original ₦40 billion plan (US$96.3 million). The bond issuance attracted participation from a diverse range of institutional investors including pension funds, banks, and insurance companies, supported by an AA rating from GCR Ratings and an A+ rating from Agusto & Co. The high oversubscription demonstrates investors’ confidence in Shelter Afrique’s mandate to enable housing development in Africa, its strong management team, business strategy and credit profile. The 5-year Tranche A bonds priced at 13.00% and the 7-year Tranche B bonds priced at 13.25%. The tenors of the bonds are aligned with the organisation’s housing finance strategy and plans in Nigeria. Shelter Afrique will use the bond proceeds to fund mass housing development by tier 1 real estate developers, and to provide lines of credit.

FDSH Capital Limited acted as the Lead Issuing House while ARM Securities Limited, FCMB Capital Markets Limited and United Capital PLC acted as the Joint Issuing Houses to the bond issuance. Other professional parties include Aluko & Oyebode and Banwo & Ighodalo who acted as Solicitors to the Issue/Issuer and Solicitors to the Trustee respectively. United Capital Trustees Limited and CardinalStone Registrars Limited acted as the Trustee and Registrar respectively. The Receiving Banks include FSDH Merchant Bank Limited, Stanbic IBTC PLC and United Bank for Africa PLC.

Announcing the result, Shelter Afrique’s Acting Managing Director, Kingsley Muwowo expressed delight at the success of the bond issuance and thanked the Issuing Houses and other professional parties for the timely and successful completion of the bond issuance. He also extended his appreciation to the Federal Government of Nigeria through the Ministry of Finance, Budget and National Planning; the Securities and Exchange Commission; the National Pension Commission, and the Ministry of Works and Housing. He thanked the Board of Directors, Management and Staff of Shelter Afrique for their invaluable support throughout the process.

Mr. Muwowo noted that: “this is the first time Shelter Afrique is tapping the Nigerian debt capital market and the positive market reception is a clear indication of investor confidence in our long-term value proposition for the Nigerian housing market. We would like to assure our investors that we shall put the proceeds of the bond issue into good use that will ensure that more value is created for them”.

Mr. Muwowo said the issuance of the Naira-denominated bonds reflects the organisation’s desire to focus on tailor-made, long-term funding solutions for the provision of affordable and adequate housing in Nigeria and across Africa. He also noted that the volatile foreign exchange rate regimes in most member countries is one of the major challenges of financing affordable and decent housing in Africa.  He explained that: “Constant currency fluctuations make it difficult for those who borrow in foreign currencies to honour their loans because of the foreign exchange exposure risks. Through this bond issuance, developers and primary mortgage lenders in Nigeria will be able to access funding in Naira, thereby reducing such risks”.

Speaking at the signing ceremony held in Lagos, Nigeria, the Managing Director of FSDH Capital Limited, Tolu Osinibi, said: “FSDH Capital is pleased to have advised Shelter Afrique on its successful debut bond issuance in Nigeria’s capital market. Shelter Afrique continues to play a pivotal role in housing development across Africa and the success of the bond issuance will encourage other supranational financial institutions to tap Nigeria’s debt capital market for their Naira funding needs. We thank the investor community for their support on the bond issuance. We also thank the Board and management of Shelter Afrique for trusting us with this milestone transaction, and their commitment and dedication throughout the process.”

Exchange Rate:  1US$ = N415.58

Nairobi: March 22, 2022 – Pan- African housing development financier Shelter Afrique, through its research and policy formulation arm, Centre of Excellence (CoE), has launched a ‘Housing Affordability Calculator’ which will help the Company better address issues of housing affordability in order to improve viability of affordable housing projects in Africa.

The housing affordability calculator, which was developed in partnership with the Center for Affordable Housing Finance in Africa (CAHF), also seeks to enhance understanding of housing affordability as it pertains to the demand and supply sides in the context of African countries.

“The question of what is affordable is pervasive, but the answer still eludes us. Basically, housing affordability is a function of the purchase price, finance and the cost of living. However, if household affordability is not accurately gauged by public or private sector developers, then there is a serious risk that there will be insufficient effective demand by households to purchase or rent the houses produced. Thus, the housing affordability calculator is vital for Shelter Afrique in evaluating housing project proposals submitted, with respect to whether the units proposed are likely to be affordable to a low income target market in that location,” said Dr. Muhammad Gambo, Head of Policy, Research and Partnerships at Shelter Afrique.

He noted that the viability of affordable housing projects depends upon accurate methods for gauging household (or buyer) affordability and achieving unit costs that meet those affordability constraints.

“This affordability calculator will also assist other stakeholders in the built environment industry to better address issues of housing affordability and to improve the targeting and viability of their affordable housing projects,” Dr. Gambo said.

The calculator requires the user to input four data points: household’s monthly income; distance from the city centre; country of residence; and the local currency or US Dollar.

The calculator then applies background data and assumptions based on the prevailing mortgage terms in individual country, percentage of monthly household income spent on transport based on distance of house from city centre, and percentage of monthly household income spent on transport and housing for each income band.

Empty apartments amid housing shortage

The push for housing development across Africa has led to a boom in new homes, but high construction costs, infrastructure, land and compliance costs mean the majority of such houses are too expensive for those who need them most.

“In most countries in Africa, even the cheapest newly-built house is still not affordable to the majority of the urban population leading to high vacancy rates as we’ve seen in some countries such as Nigeria and Kenya. Developer-built housing typically targets the higher end, and is rarely delivered at scale. But even a USD20 000 house is unaffordable for the majority – and these are only available in limited projects,” Dr. Gambo said.

Dr Gambo noted that poor affordability targeting could put pressure on governments to provide further subsidy as in the case of Vision City in Kigali, Rwanda, or in the Kilamba development in Angola” and at the same time impose target price that cannot be feasibly delivered by a developer.

“Our aim is to improve the provision of affordable houses across Africa and we hope that affordability calculator will help us achieve this goal by making such project feasible and viable on both the demand and supply sides,” Dr. Gambo concluded.

Nairobi, 18th February 2022

Shelter Afrique the Pan-African Housing Financier dealing exclusively with the promotion of affordable housing has announced the departure of Managing Director Andrew Chimphondah.

The announcement follows a recently held Board Meeting where a decision for separation was made.

Mr. Andrew Chimphondah, a Zimbabwean national was appointed as the Managing Director in September 2018. Chimphondah, who is a Chartered Accountant oversaw the turnaround strategy of the housing financier approved by its General Assembly in 2017. Chimphondah also presided over a return to profit and was instrumental in raising substantial capital subscriptions from member countries.

The organisation, however, is in the middle of a reorganisation and restructuring to optimise service delivery and during this transition, it will be stewarded by Mr. Kingsley Muwowo, the Chief Finance Officer as Acting Managing Director pending the recruitment, on a competitive basis, of a substantive Managing Director.

The Board extends to Mr Chimphondah its gratitude for his years of service and wish him well in all future endeavours.

In 2021, the financier announced plans for a $500m Naira Bond and is in advance stages of completing the process of floating the Bond on the Nigerian Stock Exchange. The Board and Management are dedicated to making the capital raise a success as a demonstration of how effective capital markets can be to spur development in Africa.

Shelter Afrique’s results after participation on the 11th Peer Review of the AADFI member-institutions with the Association’s Prudential Standards, Guidelines and Rating System (PSGRS) for the year 2021.

In line with the Company’s Strategy 2021- 2025 and Strategic Goal (SG) no. 3 on Organizational sustainability where we shall continuously improve operational excellence by continuously self-evaluating ourselves against our peers in the DFI space. Shelter Afrique is a member of Association of African Development Financing Institutions (AADFI) and regularly participates in the Peer Review with the Association’s PSGRS.

What is Prudential Standards, Guidelines and Rating Systems (PSGRS)?

The Prudential Standards, Guidelines, and Rating System (PSGRS) was developed 10 years ago by the AADFI, with the support of the AfDB, as a tool for strengthening the African Development Finance institutions (DFIs).

The tool has been useful to DFIs in assessing their areas of weaknesses and strengths with the view to reinforce the strengths and address the weaknesses. The PSGRS has also provided a regulatory guide for various DFI supervisory authorities in many African countries and served as a useful instrument in transforming African DFIs from “non-performing” to “performing” DFIs. The PSGRS has gained acceptance and recognition as an important instrument for strengthening the African DFIs.
SHAF participated in the 11th Peer Review of the AADFI member-institutions with the Association’s Prudential Standards, Guidelines and Rating System (PSGRS) for the year 2021. SHAF emerged as one of the top DFIs in Africa with an assigned Compliance Index of 91% (the very high compliance zone (80% and above) having being assessed on its Governance, Policies, Strategies and Procedures.

Zimbabwe, Harare 15 February 2022

The Government of Zimbabwe represented by the Minister of National Housing and Social Amenities, Honourable Daniel Garwe and Shelter Afrique represented by Managing Director Andrew Chimphondah, signed a Hosting Agreement for the Shelter Afrique 41st Annual General Meeting (AGM) on Friday 11 February 2022. The AGM will be held under the theme: Climate Change and the Built Environment.”

The signing of the Host Agreement signals the commitment by the Government of Zimbabwe to host the Shelter Afrique 41st Annual General Assembly earmarked for 25 to 30 July 2022 in Victoria Falls. The agreement spells out the Annual General Meeting, a ministerial roundtable and interlinked business activities as some of the events which will constitute part of the proceedings.

The Government of Zimbabwe is expected to ensure effective organisation and success of the meetings, by undertaking to contribute to the physical arrangements which include country entry requirements, provision of hosting premises, transport for designated officials, equipment required during conferencing, meeting COVID 19 related protocols for delegates and customs related formalities.

Speaking prior to the signing ceremony, Honourable Daniel Garwe who is also the first Vice Chairperson of the Shelter Afrique Bureau of the General Assembly, commended the Managing Director Andrew Chimphondah for leading a delegation to Zimbabwe and noted that the move demonstrated his conviction in the country as an ideal destination for foreign direct investment.
He explained that Zimbabwe joined Shelter-Afrique in November 1993 and since then, the organisation has invested $58.2 million in Zimbabwe through nine separate facilities.

The Minister also pointed out that Shelter Afrique held its 36th AGM in Victoria Falls and their return after 5 years for the 41st AGM demonstrates the renewed interest in Zimbabwe, providing a window of opportunity for the Government to leverage on in shaping the narrative towards robust human settlement delivery strategies.

He pointed out the gains to be accrued by Zimbabwe through hosting the AGM which include regional integration, tourism and business linkages and thanked Shelter Afrique for bestowing trust upon Zimbabwe as a Nation by selecting it as a venue of choice.

Speaking on the same occasion, Permanent Secretary in the Ministry of National Housing and Social Amenities Engineer Joy Makumbe emphasised that the signing ceremony was significant to the Ministry as it signalled the establishment of a relationship with anticipated great returns towards housing delivery in Zimbabwe.

On his part, Mr Chimphondah said the signing of the Host Agreement was significant in highlighting Shelter Afrique’s role as a catalyst in the industry and its ability to leverage partnerships.

He explained that this was envisioned to be delivered through Private-Public-Partnerships (PPPs) with the Urban Development Corporation (UDCORP).
“We have found success with this in our member countries and believe Zimbabwe is the ideal location for this,” he said.

Chimphondah thanked the Government of Zimbabwe for committing to hosting the 41st AGM, which will be the second time in 5 years.

He stressed that this would be an opportunity for the government to shape and lead the conversation on affordable housing in the region. In reference to the AGM theme, he referred to the Glasgow Conference of Parties (COP26) held last year as impetus to the need for a built environment which relates to climate change. He emphasised that housing played an important role in that regard and Africa had a role to play, which is why the proposed theme for the 41st AGM is Climate Change and the Built Environment.

Chimphondah acknowledged the unique location for the AGM. “I believe that it will be a unique AGM if for no other reason, there are very few places in the world that have the majesty of Victoria Falls,” he said.

The signing ceremony was witnessed by Cabinet Ministers, senior government officials, representatives from the financial service sector and organisations within the housing delivery spectrum.

Hon. Daniel Garwe assumed the 1st Vice Chairpersonship of the Shelter Afrique Bureau in 2021 and will succeed Cameroon as Chairman during the 41st Annual General Meeting.

More than 200 guests drawn from the 44 member countries are expected to attend the AGM as well as other interlinked activities. An international exhibition is also envisaged to attract several exhibitors from across the world.

Nairobi, Kenya- 21 September 2021 – Pan-African housing development financier Shelter Afrique has fully paid commercial debts owed to eight lenders, giving the company the leverage to underwrite new debt.

In 2018, Shelter Afrique signed a Debt Restructuring Agreement with the eight lenders – six DFIs and two commercial banks – to restructure its debt with a new 5 – Year tenor to run from June 2019 to June 2024.

The USD186 million (including accrued interest) owed to African Development Bank, Agence Française de Developpement, Commercial Bank of Africa, European Investment Bank, German KFW, Ghana International Bank, CFA-Banque Ouest Africaine de Development, and Islamic Corporation for Development was fully repaid three years ahead of schedule.

“Despite Debt Restructuring Agreement giving us a window to make full loan repayment by June 2024, we successfully repaid all the loans by June 2021. This was possible due to the new structures we put in place to deal with bad debts and loan recoveries as part of our turnaround plan. This now affords us the ability to underwrite new business and debt without constraints and legacy matters. For instance, based on our current Equity Capital base of USD 155M and a debt-equity ratio of 0%, we can instantly raise new debt of up to USD 465 million,” Shelter Afrique Group Managing Director and CEO Andrew Chimphondah said.

The company has also repaid a bond floated on the Nairobi Stock Exchange between 2013 and 2018.

Return to market

Mr Chimphondah noted that following the development, Shelter Afrique now plans to return to the capital market to raise KES125 billion (USD1.25 billion) in local-currency bonds by the end of the year.“With the debts fully retired, we now intend to mobilise a local-currency equivalent of USD500 million each from Nigeria and East Africa, as well as USD250 million from French-speaking African nations. These will be crucial in funding our demand-side pipeline of as much as USD1 billion which we are currently developing,” Chimphondah said

Mr Chimphondah added that besides the bonds, Shelter Afrique was exploring further shareholder financing, noting that the Company was already in talks with some keen organisations and countries who share a similar commitment to affordable housing in Africa.

“In the past few months, we have raised a significant amount from our current shareholders, admitted a new shareholder (Fonds de Solidarité Africain -FSA), and resolved to open a new class C group of shareholding for non-African entities to widen our shareholding and capital resource bases,” Mr Chimphondah said.