Urban infrastructure in Sub-Saharan Africa

Harnessing land values, housing and transport

Presented by Akin Olawore Research Akin Olawore, Bernard Tayoh and Ian Palmer

21 July 2015

Land-based financing in West and Central Africa

Context

• 8 property developments selected.

• Mini case study reports.

• 5 countries; 6 cities

2005 image of site

Gacuriro Estate Phase 1, Kigali, Rwanda

Key question: who was

responsible for funding the

property developments

and associated

infrastructure?

Housing unit at Arcon Ville, Cotonou

Property development mini case studies

Country - City Project name Project type

Benin - Cotonou Arcon Ville Housing – intended for low to middle income but not affordable to low income housholds

Cameroon Douala Sawa Beach Mixed use – mainly housing mid-high income

Cameroon Yaoundé

Olembe housing project Housing – middle-low income

Cote d’Ivoire

Abidjan

Abidjan Golf Resort (0ngoing)

Mixed use high income residential with commercial serving the project area

Cote d’Ivoire

Abidjan

L’opération les floraisons

Housing – some commercial

Nigeria Lagos Carlton Gate Estate Mixed use – mainly housing middle - high income

Rwanda Kigali Gacuriro Estate Phase I Housing – Middle to high income

Rwanda Kigali Gaposho Estate Phases I & II

Housing – Middle to high income

Role of National Government and City

Benin Heavy involvement by national

government as facilitator and funder

Cameroon National Government plays a key role

in housing developments

Côte d’Ivoire National Government heavily involved

with les Floraisans but much less with

Abidjan Golf Estate

Nigeria Low level of involvement by Lagos

State and National Government

Rwanda Government provided land and B&C

infrastructure for Gaposho. But B&C

infrastructure provided by Developer

at Gacurillo

Accessing land

Benin Land subsidised by National

Government

Cameroon National Government or City provided

land at no cost to home buyers

Côte d’Ivoire Land subsidised for les Floraisans, not

for Abidjan Golf Estate

Nigeria Land held by Chieftancy family who

were in joint venture with Developer

Rwanda Government provided land

Bulk and connector infrastructure

Benin National government funded B&C

infrastructure

Cameroon National Government funded B&C

infrastructure. Also and internal

infrastucture at Olembe.

Côte d’Ivoire National Government funded B&C

infrastructure

Nigeria Bulk infrastructure in place. Developer

provided some connector

infrastructure.

Rwanda Government provided B&C

infrastructure for Gaposho. But B&C

infrastructure provided by Developer

at Gacurillo

Building

Internal infrastructure

Connector infrastructure

Bulk infrastructure

Social & community infrastructure

Cross subsidise infrastructure for poor households

Land

No land-based

financing

Extreme where all

building is subsidised

Land and/or internal

infrastructure subsidised

Fu

ll c

ost

of

pro

per

ty d

evel

op

men

t

Maximum land based financing including

infrastructure for poor

households

Land based financing for

connector infrastructure, possibly other components

DIAGRAMATIC ILLUSTRATION OF LAND BASED FINANCE SPECTRUM FOR MIDDLE TO HIGH INCOME RESIDENTAL AND

COMMERCIAL PROPERTY DEVELOPMENTS

City contributes to developer costs Developer contributes to City costs

-5 5

Rating 0

Relative contributions to funding projects

Building

Internal infrastructure

Connector infrastructure

Bulk infrastructure

Social & community infrastructure

Cross subsidise infrastructure for poor households

Land

Fu

ll c

ost

of

pro

per

ty d

evel

op

men

t

City contributes to developer costs Developer contributes to City costs

-5 5

Rating0

Sawa Beach, Douala

Olembe Yaoundé

Abidjan Golf Resort

les floraisons, Abidjan

Carlton Gate Estate, Lagos

Gacuriro Estate, Kigali

Gaposho

Estate, Kigali

Arcon Ville, Cotonou

‘In kind’ contributions by developers

While ‘in kind’ contributions are fairly common in Sub-Saharan African cities there were only two projects where this contribution was substantial in this sample:

• Carlton Gate Estate, Lagos

• Gacuriro Estate, Kigali

Carlton Gate Estate, Lagos

• In Côte d’Ivoire there is an urban development levy: this is a tax levied on all urban real estate development projects, the proceeds of which are to be used to finance urban infrastructure. This falls into the category of a development charge.

• In Nigeria and Rwanda there are various charges levied on property developments but these are regulatory taxes intended to cover administration costs.

Once off charges or taxes

Land leasing

• The land rent system in Cameroon fits into the land leasing category.

• But no evidence that it was applied in the sample projects.

Olembe housing development Yauonde, Cameroon

Conclusion

• These 8 case studies indicate, on balance a low level of application of land-based financing in West and Central Africa.

• In fact the projects indicate relatively high levels of subsidy for housing for middle to high income households.

• However, there are exceptions: • Examples of ‘in kind’ contributions from two projects in Nigeria and

Rwanda. • A development charge is being applied in Côte d’Ivoire. • Land leasing is applied in Cameroon but with no evidence that the

funds raised are being used for infrastructure.

• There is much to be done in the region to expand the use of land-based financing mechanisms.

Thank you

Urban infrastructure in Sub-Saharan Africa – harnessing land

values, housing and transport