Move to narrow Cote d'Ivoire's housing gap involves financing, regulatory reforms

With demand for housing in Côte d’Ivoire continuing to outpace supply, the government has more than doubled its social housing target and unveiled a number of reforms to the sector’s regulatory framework. While a lack of available affordable units is the most immediate concern, policymakers are hoping to pave the way for a sustained increase in private sector residential developments by addressing financing, streamlining the construction permit process and clarifying land rights.

Work In Progress

Côte d’Ivoire’s housing deficit stands at 400,000-600,000 units at present, a figure that rises by roughly 40,000-50,000 units per year. The bulk of the demand comes at the low end of the market, where a lack of affordable housing has led to a rise in informal construction. As a result, the government initiated a three-year housing programme in 2012, which aimed to build some 60,000 low- to middle-income residences, with a budget of CFA428bn (€642m), targeting lower mid-market units priced up to CFA20m (€30,000) for lower-income earners.

In early 2016 Gnamien Konan, minister of housing and social housing, reiterated the government’s 2013 pledge to increase the target to 150,000 units by 2020. A total of 46 developers have signed up to build projects under the programme, with a combined 72 social housing projects in progress as of January 2016. However, in spite of these projects, construction has been proceeding at a slower pace than expected, with less than 10% of the target completed as of the end of 2015. Mamadou Sanogo, minister of construction, housing, sanitation and urban development, has attributed the delay to feasibility studies and land rights issues.

Focus On Financing

In addition to expanding the supply of units, the government is also looking to improve affordability, particularly for first-time lower-income buyers. As with many frontier markets in Africa, access to finance in Côte d’Ivoire remains a major concern for developers and homebuyers alike. The shifting price structure of affordable housing has put units out of reach for many Ivorians. As a result, the government has moved to bolster the country’s financing schemes. Interest rates offered by the Housing Mobilisation Account – a national fund providing refinancing to banks that extend credit to homebuyers – were reduced significantly while payment periods were more than doubled. In addition, in mid-2016 the government announced new incentives for developers. Konan said the government would purchase 100% of social housing units from developers for re-sale to individual buyers. The government plans to finance this initiative through the Housing Support Fund.

Regulatory Overhaul

With the World Bank ranking Côte d’Ivoire 182nd out of 190 countries in its 2017 ease of doing business index in terms of dealing with construction permits, there is scope for improvement. The government has been working to reduce obstacles limiting development, streamlining procedures for construction permitting and property registration.

Importantly, the government has taken steps to resolve long-standing confusion over land rights, which has led to ownership disputes over lots. Informal and fake titles remain prevalent, and just 30% of landowners hold official property titles, limiting both developments and mortgages. The introduction in July 2013 of a single land ownership title has helped clarify transactions. Documentation is now meant to be completed within three months, while registration costs have been reduced to 9.6% of the property’s value, according to the Centre for Affordable Housing Finance in Africa, above the sub-Saharan average of 9.1%.

These reforms followed the rollout in 2014 of a onestop shop to facilitate the delivery of building licences, which reduced wait times from an average of a year to 87 days between 2013 and 2014. Also, thanks largely to digitisation of the land registry system and lower registration taxes, the country’s ease of doing business ranking in the property registration category improved from 130th out of 190 in 2015 to 113th in 2017.


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The Report: Côte d'Ivoire 2017

Construction & Real Estate chapter from The Report: Côte d'Ivoire 2017

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