The Group Managing Director and Chief Executive Officer (CEO) of Shelter Afrique, Mr Andrew Chimphondah has propelled the company back on the path of profitability, writes Gilbert Ekugbe
As Pan-African development financier Shelter Afrique hits 40 years of existence, it continues to demonstrate resilience and endurance by steadily spreading its footprint across the African continent against all odds.
Recently, the company was named Africa’s Best Real Estate Finance Company, 2021 by London-based Capital Finance International.
The award was in recognition of the company’s dedication to funding affordable housing developments throughout Africa.
The journey has not always been smooth sailing. It was only three years ago, under the leadership of the current Group Managing Director and Chief Executive Officer (CEO), Mr Andrew Chimphondah, that Shelter Afrique was propelled back on the path of profitability. Before his tenure, it had recorded continuous losses for more than four years.
Andrew Chimphondah joined Shelter Afrique in 2018 at a pivotal time for the organisation, which was going through some turmoil at the time. The company’s executives were battling to keep the financial institution afloat. “I was fully aware of the situation when I joined,” he said. “At the time, you could draw parallels between the company’s challenges and the industry’s struggles. However, Shelter Afrique has a 40-year history of redefining itself to adapt to any climate in which it finds itself. With the unambiguous backing of the board and the excellent management team, we were able to return the institution to profitability and set it back on the path of doing what it does best, which is furthering and facilitating affordable housing across Africa.”
Before he was appointed CEO of Shelter Afrique, Chimphondah was the CEO of Housing Investment Partners, a fund management organisation in South Africa that specialises in fundraising for affordable housing. With him at the helm, the company raised at least R1 billion every year in funding while also boasting R1 billion in assets under management, expanding at a rate of R1 billion each year.
Nigeria in His Sights
The United Nations has reported that Nigeria could face a housing deficit of 22 million homes by 2030 if its government does not take strategic measures. Chimphondah believes Shelter Afrique is in a prime position to tackle the crisis in Nigeria head-on, declaring that every African deserves an affordable home.
“Nigeria has Africa’s greatest population by far, and Nigeria’s population is expected to reach over 400 million people by the year 2050, according to the United Nations. This is the situation of things. Right now, we believe the housing deficit in Nigeria is 17 million homes. This is a massive number, and it’s part of the reason why we have chosen to pay special attention to Nigeria.”
Nigeria’s homeownership rate remains at 25 per cent, the lowest among other African nations such as Kenya, which has a rate of 75 per cent, and South Africa, which has a rate of 56%. This housing deficit is particularly visible in major Nigerian cities such as Kano, Lagos, and Ibadan, where housing demand is spiralling at 20 per cent per year.
Chimphondah has expressed his belief in both the capital market and public-private partnerships as avenues in the quest to solve Nigeria’s housing challenge. The impact of government policy is also not lost on the man at the helm of Shelter Afrique.
He said, “We have found that the capital markets are an underutilised source of money. This is why as part of our process, we also use our contacts and networks to crowd-fund affordable housing projects. Some of the multilateral entities we collaborate with include the African Development Bank, the European Investment Bank, and the World Bank.
“We actively explore public-private partnerships because working with government bodies, we can streamline the entire process of erecting housing structures. Governments can subsidise infrastructure and provide financial incentives such as tax cuts. They can also enact policies that make the environment more conducive for developers to work freely.”
The affordable housing trailblazer has collaborated with an impressive number of organisations and countries across the continent and beyond. In its 40-year existence, Shelter Afrique has amassed an impressive footprint across various African markets including Kenya, Uganda, Rwanda, Mauritius, Madagascar, Somalia, and Burundi.
In July 2021, Shelter Afrique inked its most extensive partnership with an organised body. The Pan-African housing financier and REDAN (Real Estate Developers Association of Nigeria) signed a Memorandum of Understanding on 29 July 2021. The cooperation with REDAN will result in the construction of 12,000 affordable housing units across the six geographical zones of the Federal Republic of Nigeria.
While commenting on this collaboration, Chimphondah stated, “We’re excited about our partnership with REDAN, especially because it allows us to have an impact on a group we believe are best positioned to drive these projects, the developers. With this endeavour, we are helping developers across Nigeria build capacity.
“It also follows our annual general meeting in Yaoundé, Cameroon, where we became the first organisation to bring together 44 housing ministers and 44 finance ministers to discuss how to address Africa’s 56 million housing shortfall. We came up with the historic Yaoundé Declaration, in which African governments, housing and finance ministers, and policymakers all vowed to improve sustainable housing delivery in Africa.”
The need for residential real estate in major Nigerian cities is predicted to rise due to shifting work formats brought on by the COVID-19 epidemic, as remote work becomes a key driver of space demand. The rise in warehousing demand and an e-commerce and online trade expansion are propelling rapid growth in the industrial sub-sector.
Shelter Afrique’s Growth in Numbers
The company’s total comprehensive income grew to USD 1.85 million in 2020, up from a total comprehensive loss of US$1.26 million in 2019, marking a 247 % year-on-year rise – despite the COVID-19 pandemic’s arrival in the first quarter of 2020.
Despite the challenging economic environment in 2020, the company was successful in concluding its long-awaited Debt Restructuring Agreement (DRA) with six Development Finance Institutions (DFIs) and two commercial banks, namely the African Development Bank, the European Investment Bank, Agence Française de Développement, The KfW, West African Development Bank (BOAD), Islamic Development Bank, NCBA Bank Kenya, and Ghana International BV.
Shelter Afrique seeks to resolve Africa’s housing difficulties by developing public-private partnerships to turn slums into acceptable dwellings, sponsoring programs to rebuild homes devastated by conflict, and advocating for truly sustainable housing initiatives. It has set aside upwards of $1billion in its 2019-2023 strategic plan to support new housing developments, intending to raise $20million in annual equity capital from new and existing members.