As Habitat launches pro-poor loans
From Paul Okunlola, Nairobi, Kenya
HOUSING and Urban Development Ministers in Africa, faced with a higher population of slum dwellers than any other region in the world, are canvassing urgent international support towards raising funds to tackle the growing number of people with inadequate housing on the continent.
The campaign is coming as six nations and organisations yesterday became the first clients in a $5 million funding facility aimed at boosting the provision of pro-poor housing and related infrastructure in developing countries.
The new facility, known as the Experimental Reimbursable Seeding Operations (ERSO), was formally launched in Nairobi, Kenya, yesterday, with the signing of agreements with the pioneer set of participating nations.
The ERSO Trust Fund, from which the funds will be disbursed, has been established to explore new ways of inducing and enabling existing local financial institutions to serve low-income market segments in a sustainable manner.
The initial participants under the scheme are accessing the scheme through a partnership between UN Habitat on the one hand, and the Housing Finance Corporation of Kenya, Habitat for Humanity International, Azania Bank of Tanzania, ARBAN of Bangladesh and Development Finance Company (DFCU) of Uganda on the other.
The bulk of the funding raised under the facility has come through donations to the ERSO Trust Fund by the governments of Spain and the Kingdom of Bahrain.
Going by statistics released this week, 62 per cent - or close to two-thirds of urban dwellers in sub-Saharan Africa - live in slums. This is against 43 per cent in South Asia, 37 per cent in East Asia, 28 per cent in South East Asia, 27 per cent in Latin America and the Caribbean, and 15 per cent in North Africa.
But Africa's Housing and Urban Development Ministers, pledging to raise fresh funds to tackle the challenges of slums on the continent, said on Wednesday that a separate new continent-wide funding mechanism was being developed to tackle the growing number of poor residents in their cities.
Addressing the 22nd Governing Council of the United Nations Human Settlements Programme (UN Habitat), Nigeria's Minister of State for Housing and Urban Development, Chief Grace Ekpiwhre, affirmed that the ministers, under the umbrella of the African Ministerial Council on Housing and Urban Development (AMCHUD), had resolved to address the urban challenge and ensure rapid and large-scale progress towards the Habitat Agenda and the MDGs "as an urgent priority."
She told delegates from 101 countries represented at the meeting that African countries had pledged to "Commit to and actively seek through a Feasibility Study the establishment of a continent-wide 'African Fund for Slum Upgrading and Prevention' in partnership with development partners and international development finance institutions."
The proposal for establishment of a Slum Upgrading Fund, first adopted by the ministers at the second Ministerial summit of the council held in Abuja in August last year, has also been endorsed by the UN-Habitat Governing Council through its Resolution GC 21/8.
According to Chief Ekpiwhre, who spoke in her capacity as current co-chair of AMCHUD, the group's secretariat has already been given a mandate to urgently pursue the establishment of the Fund.
"In order to implement the Abuja decision to speedily conclude the feasibility study for the establishment of an Africa Fund for Slum Upgrading and Prevention, the AMCHUD Secretariat has also approached the Development Bank of Southern Africa to consider the feasibility of establishing the Africa Fund for Slum Upgrading and Prevention. The secretariat has also approached South Africa's National Housing Finance Corporation to assist in drafting a proposal for the constitution of the Fund," she said.
United Nations Under-Secretary General and Executive Director of UN Habitat, Dr Anna Tibaijuka, said the ERSO funding facility was set up "to show national governments how this can be done and what changes are required to government policies, strategies and business processes to help such initiatives go to scale."
The facility, she said, essentially seeks to blend community savings, micro-credit, private capital and support from government and municipal sectors to reduce the perceived risks of providing housing solutions for the urban poor.
Funds accessed under the facility range from $200,000 to $500,000, and they are repayable over periods ranging from two to 15 years.
