Nigeria has pledged to pay the full capital arrear of Ksh.3.2 billion in Shelter Afrique,
Nigeria’s Finance Minister Dr. Zainab Shamsuna Ahmed disclosed at a meeting with Shelter Afrique Group Managing Director and CEO Andrew Chimphondah in Abuja.
The payment will be made in four installments starting January 2022.
In September 2020, the pan African housing development financier received over Ksh.1 billion million from Nigeria. The contribution moved Nigeria to become the second-largest shareholding in the organisation with 13.27% of the shareholding, behind Kenya with 17.78 percent and ahead of the AfDB at 12.83 percent.
“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,” said Chimphondah.
Shelter Afrique is planning to raise 250 Billion Naira Bond (Ksh.68.5 billion) in 2022 to support its affordable housing projects in Nigeria. The Company is set to commence the roadshows 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,” Mr. Chimphondah said.
Chimphondah said that Nigeria was a critical and strategic market for Shelter Afrique and that the fund realized from the bond issue will go a long way in address 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.”