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Nigeria commits to pay off $28.7m capital arrears in Shelter Afrique

Payment to be made in four instalments starting January, reports Mike Omudo

NIGERIA has pledged to pay the full capital arrears of $28.7m in Shelter Afrique, Nigeria’s Finance Minister Zainab Shamsuna Ahmed disclosed at a meeting with Shelter Afrique Group Managing Director and CEO Andrew Chimphondah in Abuja.

Shelter-Afrique is a pan African housing finance and development institution established by African governments to address the need for a sustainable housing delivery system and related infrastructure projects in Africa. Shareholders include 44 African countries, the African Development Bank, the African Re-Insurance Corporation, and Fonds de Solidarité Africain (FSA).

The minister further disclosed that the payment will be made in four instalments starting January 2022.

In September 2020, Shelter Afrique received $$9.4 million from Nigeria. The contribution made Nigeria the second largest shareholder in the organisation with 13.27 percent of behind Kenya with 17.78 percent and ahead of the AfDB at 12.83%.

Commending Nigeria for its confidence in the institution, Andrew Chimphondah said, ‘This is a major milestone which is set to propel Nigeria to become the largest shareholder in Shelter-Afrique when the country meets its capital commitment. This is a strong testament of the strong shareholder commitment and support of the Shelter Afrique Board and Management.’

Housing Bond

 Shelter Afrique is planning to raise $500million in 2022 to support its affordable housing projects in Nigeria. The company is set to commence the road shows with prospective investors in January 2022 and is expected to conclude fundraising by end of February.

‘Shelter Afrique has embarked on a defined strategy of developing and deepening local capital markets so that access to local currency which is competitively priced can be made available to Nigerian Developers from the Real Estate Developers Association of Nigeria (REDAN), Large Developers and Tier 1 and Tier 2 Banks and Primary Mortgage Lenders. The significance of this is that Shelter-Afrique will have been successful in dealing with the foreign exchange exposure risks that have crippled many African countries caused by the weakening of local African currencies against hard currencies such as the United States Dollar and the British Pound Sterling,’ Chimphondah said.

Thanking finance minister Ahmed for supporting the Bond Issue by the approvals received on critical waivers from her ministry, Chimphondah noted that Nigeria was a critical and strategic market for Shelter Afrique, adding that the funds realised from the bond issue will go a long way in addressing affordable housing shortage in the country, now estimated at 17 million units against the continent’s 56 million units.

‘As a response to addressing this housing shortage, Shelter Afrique will implement a transformative strategy that will crowd in additional capital funding into the low cost large scale affordable housing market in a commercially viable manner,’ Chimphondah concluded.

Shelter-Afrique’s mandate is to provide financing through debt, quasi-equity, and equity to both public and private institutions for housing and urban infrastructure projects in its member countries. Shelter Afrique builds strategic partnerships and offers a host of products and related services to support the efficient delivery of affordable housing and commercial real estate. These include project finance, institutional lending, equity investments & joint ventures, trade finance, and social housing.





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