The Niger Republic is a landlocked country in the north-western part of Africa. It is bordered by Algeria and Libya to the North, Benin and Nigeria to the south, Burkina Faso and Mali to the west and Chad to the east. It covers 1 267 000 km2 with two-thirds of its land mass desert. The population is concentrated in the narrow strip in the south where the main economic activities are farming and herding. Only 12.3 percent is arable land and the main cash crops are onion ‘violet de Galmi”, peanuts, sesame and black eyed peas “niebes”. The country is rich in natural resources; uranium, petroleum, coal, gold, molybdenum, tin, phosphates, iron ore, gypsum and salt. In 1993 Niger was the first producer of uranium and the third largest producer of uranium in the world in 2012. Also, Niger started producing petroleum in 2012. Among the natural resources only uranium and petroleum are being exploited. Niger in spite of its resources is among the least developed countries in the world with one of
The Niger Republic is a landlocked country in the north-western part of Africa. It is bordered by Algeria and Libya to the North, Benin and Nigeria to the south, Burkina Faso and Mali to the west and Chad to the east. It covers 1 267 000 km2 with two-thirds of its land mass desert. The population is concentrated in the narrow strip in the south where the main economic activities are farming and herding. Only 12.3 percent is arable land and the main cash crops are onion ‘violet de Galmi”, peanuts, sesame and black eyed peas “niebes”. The country is rich in natural resources; uranium, petroleum, coal, gold, molybdenum, tin, phosphates, iron ore, gypsum and salt. In 1993 Niger was the first producer of uranium and the third largest producer of uranium in the world in 2012. Also, Niger started producing petroleum in 2012. Among the natural resources only uranium and petroleum are being exploited. Niger in spite of its resources is among the least developed countries in the world with one of the lowest human development index, which, at 0.337 in 2013 and ranking last of 187 countries. The country has suffered from political instability and is still suffering from external threats along its borders; conflicts in Mali and Libya and religious conflicts ‘boko haram’ in Nigeria.
The country’s economic growth slightly improved in 2014 and 2015 as illustrated by the GDP in spite of armed conflicts in the neighbouring countries and threats from ‘boko haram’. The real GDP growth rate in 2014 increased to 6.9 percent as expected from 4.1 percent in 2013 despite security challenges. The growth was driven mainly by the construction sector, communication, transportation and agriculture which enjoyed a favourable weather and the implementation of the reforms in mining legislation which raises the country’s tax revenue, especially Value Added Tax. The trend is expected to continue in 2016 with an estimated GDP rate of six percent.
Niger Republic has a young and growing population, 18 million inhabitants, three million live in cities, making the country lightly urbanised compared to other countries in the region. With a fertility rate of 7.6 children born per woman, one of the highest in the world, the urban population is estimated to double in 12 years and the demand for housing to remain very high.
Access to finance
Penetration of formal financial services is very low in Niger. In the past decade, however, Niger has witnessed the establishment of a number of new insurance companies, micro finance institutions and commercial banks and an increase in branches (49 in 2009, and some more recently, in the capital), most of which belong to the four largest commercial banks in Niger. The branches are concentrated in Niamey, the capital, with very few in other main cities. There are 11 commercial banks, a bank of agriculture (Bagri) established in 2011 and one mortgage bank (Banque d’Habitat), created early 2011 but still not operating. The practice of microfinance in the country is steadily growing, with about 15 active microfinance institutions (MFIs). Capital Finance and some others provide housing finance products, primarily for land purchase. These 15 MFIs reported to the Mix Market (an online repository of microfinance performance data and analysis) in the second quarter of 2015, and disbursed a total of US$15.9 million loans to 136 328 borrowers. These MFIs also held US$5.7 million in deposits from 321 151 consumers in the country. The data provided by Mix Market did not include deposits and loans disbursed by Asusu SA, one of the most popular MFIs in Niger. It is difficult to estimate the amount used for housing, however.
Prior to 2000, the government of Niger offered housing finance and government subsidised homes to government employees through a public and private owned credit and loan institution known as Crédit du Niger (CDN) and through a government-owned housing development company called Société Nationale d’Urbanisme et de Construction Immobilière (SONUCI). SONUCI is still operating but CDN has been liquidated, and in 2011 was replaced by Banque d’Habitat which to date is still not operating. In 2012, SONUCI developed a strategic partnership with some housing developers to build 2 000 houses by 2014. In 2013, construction was under way and each of three prototype houses has been built and can be visited by potential clients. Construction is still underway in 2015.
A few commercial banks, such as Bank of Africa, Ecobank, Banque Atlantique Niger SA, BIA Niger and Sonibank offer housing loans to employees of private companies. In most cases these companies are the banks’ clients and the loans are secured by the employer, or are mutual guarantee loans. In 2011, Ecobank and the national labour union of teachers (Syndicat National des Enseignants du Niger, or SNEN) signed a partnership agreement to finance an affordable housing development programme for teachers all over the country. Some of the beneficiaries were awarded their homes in 2012 and 2013. The initiative has had a positive impact in Niger, and other trade unions have developed similar projects with commercial banks or microfinance institutions. For the first time a trade union, Confederation Nigerienne Du Trvail (CNT), has developed a similar programme with the exception of accepting non-members of the union to participate in the programme as long as they meet the eligibility criteria.
Mortgage financing is still in an embryonic stage due to the low average income of employees in Niger, as well as other constraints, such as the low percentage of the population who are employed. There is no mortgage bank in Niger however some commercial banks as stated above offer housing loans under certain circumstances such as having a fixed employment for an individual seeking loan with the employer as a collateral and having a partnership or other agreements for developers or institutions in the housing industry. In most cases the down payment or requirement is a minimum of 10 percent-25 percent of the loan. The interest rate is between 8 percent and 10 percent. Apart from banks and other formal enterprises some private but informal housing promoters use their personal funds to build houses for low income and higher income brackets for rentals. Other forms of housing finance include personal savings, remittances and family assistance.
As with the majority of the West African Economic and Monetary Union countries, long-term funding remains a major challenge for Niger’s housing market. Nevertheless, there are opportunities for developing national and regional mortgage banks and credit bureaux.
Access to mortgage finance is extremely limited, and when available, interest rates and loan tenure render the cost of borrowing very high. As such, the majority of the population cannot afford housing. The smallest mortgage available is CFA Francs 6.5 million (about US$14 444), which, at an interest rate of 10.5 percent and repayable over seven to 15 years, would require a monthly repayment of US$129 to US$218. About seven percent of the country’s population earn below US$60 a month (or US$2 a day), which makes even the smallest mortgage unaffordable. The high cost of borrowing in terms of interest rates also contributes to the low mortgage affordability in the country. Only about 22 percent of salary workers (representing less than one percent of the entire population), in most cases high-level government officials, and to some extent middle management staff in private companies and international organisations have access to housing finance.
The majority of the population in the urban areas rent their homes. Rental homes are provided primarily by informal housing promoters and SONUCI. Rents vary according to the quality and location of homes. They range from the equivalent of US$150 to US$3 000 a month in Niamey. Other forms of rentals include the popularly known ‘rooms’ or ‘room and parlour’ arrangements. These are found all over Niger, especially in the popular streets of the capital, and the average rents are between US$20 and US$100 a month. At present no company or institution provides rentals on a larger scale, not even SONUCI that used to do so in the past. Additionally, less than 0.1 percent of the population has access to government subsidies for housing due to the fact that only salaried workers (and particularly government employees) qualify for subsidised houses.
Housing stock in Niger can be classified in three categories, based on the material used for construction: construction with mud and straw, and ceilings of wood (maison en terrecuite /banco); construction with mud and plaster with cement, and corrugated iron sheet for the ceiling (maison en semi dur); and construction with cement, concrete and stone, and corrugated iron for the ceiling (maison en dur) – modern homes. The average cost of construction of the different categories depends on the geographical location, the size of the land, the plan and the quality of the material used. The three categories are found all over Niger. In the capital, housing stock is predominantly constructed with durable materials, cement and concrete.
According to Sahel Dimanche, the public national newspaper, the rate of housing supply is insufficient to meet the demand, as illustrated by different national surveys. Demand is estimated to be 50 000 units per annum, for the whole nation and 6 000 for Niamey, the capital. The economic growth, political crisis in Libya and Mali and the rate of urbanisation have all accentuated rents and demand for houses in Niamey as well as in other cities. The absence of mortgage banks in the provision of end-user finance is a major challenge to the development of housing.
There are no recent statistics about the number of registered companies in the construction industry but majority of the companies are in roads and other urban infrastructure with very few in the real estate sector. Those in the real estate sector focus on land acquisition from traditional proprietors and servicing the land into plots. The serviced plots are sold to potential homeowners who build their homes incrementally. The majority of potential homeowners finance these purchases with savings and loans. There are different methods of financing by commercial banks and MFIs, but among MFIs the most popular consists of initial savings over three to five years for land acquisition, after which a loan is granted according to the client’s income and the land title. The loans in most cases are insufficient for building a home; therefore most homeowners build their homes over a period of time.
In the 40 years between 1960 and 2000, the government of Niger financed only 1 236 houses. Prior to 2000, the government of Niger offered government subsidised homes to government employees only and precisely medium and senior civil servants. More recently, the government has introduced policies that are intended to induce the private sector to participate in developing housing. These initiatives include public private partnerships and facilitating access to land for developers. The construction of low income houses such as the Sary-Koubou project, in Niamey financed by government, and the projet la Renaissance du Niger, financed by SONUCI, local banks and regional financial institutions are examples of recent progress. The Sary-Koubou project consists of 174 units made up of 1 to 4 bedrooms houses. Each unit is constructed on 200m2-400m2 and the project is located in Niamey. In 2014, 38 out of the 174 houses of the Sary-Koubou project have not been delivered. The beneficiaries all signed the necessary documents for ownership last year and the remaining 38 houses which did not meet the deadline of 2013 were all delivered by August this year (2015). By August 2015 the 174 houses have all been delivered to their owners and they are fully occupied. The (projet de la renaissance) consists of 1 000 units of one to four bedrooms houses to be constructed all over the nation and 2 000 serviced plots of land. Each unit is constructed on 200 m2 – 400 m2. The Sary-Koubou houses are mainly for middle and senior income government employees, the projet de la renaissance concern all Nigeriens without distinction as long as you meet the conditions which are 25 percent down payment, and the conditions of any of the banks approved by SONUCI. Other important projects under construction include the teachers’ trade union housing programme. A project for members of “Syndicat National des Enseignements du Niger, SNEN” the project consist of 2 500 units to be constructed all over the country by DB-IMMO and financed by ECOBANK. Twenty nine (29) units were delivered in 2012 in Niamey and since then there is no official data for deliveries but the first phase of the project 1 058 units are under construction. The Société Nigérienne Des Products Pétroliers (SONIDEP) villas and the customs trade union housing in Niamey; the Capital Finance project has not been implemented although the company continues to sell serviced plots of lands.
Housing supply is expected to be boosted by the construction of low income housing units financed by the government or private investors among which is the construction of 100 houses in Dosso by SONUCI (Dosso Sogha) delivered in August 2015, 100 houses “Cite de renaissance” in Niamey, 198 houses by Society Federal Niger development in Niamey, 50 houses by SATU SA in Dosso, 76 houses in Maradi by DB IMMO, 248 houses for the military in Niamey, the acquisition of 88 hectares of land and 1 000 plots of land acquired by the government. Some public private partnership projects in the pipeline includes 1 000 houses by UPSTAND group in partnership with CBAO-Niger, 1 000 houses to be constructed by the Indians, 5 000 houses by China Geshouba Group co. Ltd, (CGGC) and 1 000 by Leawan Multilinks services.
Property prices have risen steadily over the past five years given an increase in demand for houses (and insufficient supply) also spurred by the boom in the mining sector in spite of the recent turmoil in the uranium sector. Due to the nascent petroleum industry, and the increase in urbanisation, there is a high demand for property. Foreign investors, rich Nigerien citizens and Nigeriens from the diaspora are buying properties and investing heavily in modernising the stock of residential and commercial properties in the capital and other cities. The growth in the market is expected to continue due to the growing demand for houses and commercial outlets, coupled with the ambitious programme of the president, known as ‘Niamey Nyala’ or ‘Niamey the cute’, a programme to metamorphose Niger’s capital city Niamey into a modern, attractive city.
According to the World Bank’s 2015 Doing Business Report, Niger ranks 95th globally in terms of ease of registering property. Four procedures are required to register property (less than the six procedures required, on average, across Sub-Saharan Africa), and the process takes 35 days (almost half the Sub-Saharan African average). Niger has maintained property value, nine percent compared to 11 percent of 2013, but the cost of registration is still relatively high.
Policy and regulation
Since the late 1990s, there has been a significant evolution in urban planning and urban management. The Niger Republic’s national policy and regulation on land (Politique Nationale en Matière d’Habitat) was adopted on 29 December 1998. The law defines the procedures for housing finance and the approach to promoting housing development. These include creating a national housing fund scheme, creating a national research centre to promote construction materials and technology, and transforming CDN into a housing finance bank. The national policy on habitat advocates for housing loans by commercial banks, and encourages private investments and savings.
In 2012, the Public Private Partnership Act was adopted. This relates to the development of urban infrastructure, especially housing, where long-term financing is crucial. The goal of the act is to promote private interest in the development of housing and other urban infrastructure.
In terms of urban planning and land administration, the land administration law (la Loi d’Orientation sur l’Urbanisme et l’Aménagement Foncier, or LOUAF) was adopted in March 2008. LOUAF deals with customary property rights and decentralisation. The adoption of LOAUF has contributed to the clarification of responsibilities between the central authority and communal authorities. This in turn facilitated the registration of properties in rural areas. Prior to implementation, it was impossible to register rural land or properties. Research is needed to measure implementation and evaluate the impact on the decentralised communities and on the development of housing and housing finance in Niger and other UEMOA countries.
There are different ownership rights (for example, full and temporary rights, as well as customary rights). Although there has been reform in land administration, the registration of properties to obtain full ownership rights of land and property – land and property titles, or Titre Foncier – remains a challenge. The difficulties encountered will hopefully be addressed by Sheida, the reform system adopted by the UEMOA countries in 2006 to simplify the process of obtaining full ownership title. The reform has reduced significantly the cost of registration, and has eliminated unnecessary bureaucratic authorisations. The outcome of the reform can be measured in terms of the number of land titles awarded before and after the introduction of Sheida: 150 before and 1 000 after. There is an urgent need to update these figures and evaluate the impact of Sheida.
Sheida, LOUAF and the new investment code will certainly contribute to accelerating the development of housing and housing finance in Niger.
Niger has adopted a law (law NO 2013-28 of June 2013) laying down the foundation of urban planning and urban management since 2013. The decree to implement the law (2014/555) was signed last year and this is a major reform in urban regulation. It is expected that the decree 2014-555 dated 31st of July 2014 to enforce the law, will facilitate the implementation of projects of upgrading slums and contribute to making urbanisation a tool for economic and social development. Additional policies include:
• The Niger Republic’s national policy and regulation on land (Politique Nationale en Matière d’Habitat) Adopted on 29 December 1998: The law defines the procedures for housing finance and the approach to promoting housing development. It advocates for housing loans by commercial banks, and encourages private investments and savings.
• The Public Private Partnership Act was adopted in 2012: Promote the development of urban infrastructure, especially housing, where long-term financing is crucial. The goal of the act is to promote private interest in the development of housing and other urban infrastructure.
• The land administration law (la Loi d’Orientation sur l’Urbanisme et l’Aménagement Foncier, or LOUAF) was adopted in March 2008: Deals with customary property rights and decentralisation. The adoption of LOAUF has contributed to the clarification of responsibilities between the central authority and communal authorities.
Niger offers great opportunities for housing and mortgage products, for the following reasons: a huge deficit in affordable and adequate houses, the uranium exploitation, the exploitation of petroleum and complementary activities, the influx of foreign investors in the mining, petroleum and agricultural sectors and a significant increase in the income of middle class Nigeriens. The nascent energy industry among which are the Salkadamna project one of the largest coal mine in Africa exploitation starting in 2016. The development of cement industries as illustrated by the authorization awarded to Dangote Group to boost cement production. Niger is very rich in mineral resources especially resources such as limestone and gypsum used in making cement. In spite of the abundance of resources, there is only one company that manufacture cement in Niger “Societe Nigerienne de Cimenterie, SNC”. Although SNC has a very good product but its production cannot meet local consumption the country therefore has to import to satisfy its needs. The price of cement in Niger is very high at 6 500fcfa for a 50kg bag compared to 3 000fcfa in Senegal. Niger being a landlocked country pays a relatively high cost for logistics. Cement production can be very costly in terms of energy consumption, that is probably why the industry was not developed, but the rate of urbanisation, the government program for housing and the development of energy and infrastructures favour the development of cement industry. A part from Dangote there are other foreign investors interested in the production of cement in Niger some of them are in the process of obtaining their authorization among which are ADOHA group, a Moroccan group and one of the big producers in northern Africa. The development of cement industries will definitely contribute to local supply of cement, generate employment, revenues for the government, make cement price competitive and accelerate the development of urban infrastructures and housing.
The Niger market also offers potential for other urban infrastructure investment. There is a need for long-term financing to develop affordable houses for the majority of people in Niger, and higher income properties for the minorities and expatriates. The ambitious government programme to transform the capital city of Niamey into a modern city also bodes well for increased investment. The reform in land management, registration of properties and fiscal advantages offered by the government of Niger Republic to formal private enterprises are incentives for promoting a dynamic housing development business and housing finance.
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