- Construction is booming as the economy expands -
Zambia has a serious shortage of housing and is offering private developers ready access to land
investment in the economy and the revival of the mining sector has prompted
a construction boom driven by infrastructure projects such as road rehabilitation
and residential and commercial development.
The National Housing Policy document of 1996 identified a need for more than 860,000 housing units and recommended construction of 110,000 units per year. The policy suggests that 15 percent of the national budget should be spent on building houses annually, but the actual amount spent and the rate of construction have been falling far below the target.
Due to budgetary constraints, we have been receiving 2 percent instead of 15 percent, which means that investment in the housing sector is negligible, says Sylvia Masebo, Minister of Local Government and Housing. We have not been able to meet our targets and the population has been growing at a very fast rate.
Lusakas total housing stock stands at approximately 300,000 units, of which only 10 percent is formal housing. The remaining 90 percent consists of squatter units, which house around 70 percent of the citys population on less than 20 percent of its residential land.
Glynn A. C. Khonje, Director of the Department of Physical Planning and Housing, says poverty deprives many of Zambias citizens of their right to proper housing. A necessity for adequate housing is finance, which the poor have little access to, partly because they have no jobs, he says.
As in other sectors of the economy, the government believes that the answer lies with the private sector and is encouraging investment. We have been creating an enabling environment, says Ms Masebo. We have opened up blocks of land to any investor who is interested in putting up housing, or commercial or industrial developments. The demand for housing is very high. It is a very viable business.
The government has put in place a number of measures to encourage foreign investors. Incentives include easy repatriation of profits, removal of rent and foreign exchange controls, reduced customs duties and duty free imports of some raw materials, and easy access to land.
The state-owned National Housing Authority (NHA) has large reserves of prime land for housing in the major cities but lacks the financial capacity to make use of it. The numbers of new housing units it is able to complete per year are in the hundreds rather than the thousands, and it is seeking private companies to work in partnership with.
We are anxious to find developers to undertake joint venture housing programmes with us in order to increase the annual output as well as our return on investment, says Julius Kaoma, the NHAs Chairman. Risks for investors are minimal. The backlog is huge and the market is ready to pay for housing. All the units we have constructed have been sold without difficulties. Where a decision is made to rent the units, the occupancy rate is always 100 percent.
A large market exists for rented accommodation in all categories, while houses for sale are urgently needed in Lusaka, the Copperbelt and provincial centres.
On its website, the NHA is advertising more than 10,000 project proposals with a combined cost of £16.6 million for the construction of house types ranging from low cost to affluent. These are only part of the number of projects we have waiting in the pipeline, says the NHAs Chief Executive Officer Joseph Kaoma.
While the level of development the authority has been able to achieve is small compared to what is needed, the NHA is the leading institution in the provision of housing, with a number of successful projects to its credit. Most of its programmes are paid for by reinvesting its own funds but it has also successfully undertaken projects funded by the World Bank and the European Development Fund.
Housing construction offers bright, long-term prospects for investors, says Dr Kaoma. There are a lot of investors coming into various sectors of the economy such as mining and manufacturing, and that means that the demand for housing will continue to grow.
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