Harare plans $80m housing fund for the poor

Harare plans to raise up to $80 million in bond finance for housing for the city’s poor and is considering replicating Senegalese capital Dakar’s model of mobilizing infrastructure finance from African capital markets.

In January, Dakar with the support of USAID’s Development Credit Agency and the Bill and Melinda Gates Foundation, launched the first non-sovereign-backed municipal bond in all of Sub-Saharan Africa outside of South Africa, a 7-year, tax free bond amounting to $41.8 million.

The bond, which will raise funds for the construction of a marketplace for more than 3 500 street vendors, is being watched closely by other cities throughout Africa as a model to plug the growing municipal investment gap.

It opens for subscription on February 19 and has an offer rate of 6.6 per cent to be paid semi-annually.

Harare mayor, Bernard Manyenyeni  said yesterday the city was considering the funding model.

“Following the success of the Dakar Municipal Finance bond Programme, the Affordable Housing Institute (a United States-based global non-profit consulting firm specializing in housing policy and finance) is interested in replicating the model elsewhere in Africa,” he said in a press release.

“I have requested and positioned Harare for this possibility.”

Manyenyeni said Harare stands a very good chance to access the funding because Zimbabweans are generally compliant in paying mortgages.

He also said Jeremy Gorelick, AHI’s Capital Markets managing director and is responsible for its municipal finance programme, is expected in the capital this week to assess Harare’s credit worthiness and readiness to accept the financing model.

Harare has a target to deliver 105 000 houses by 2018 under the ZIMASSET economic blue print.- The Source

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