Niger

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Niger Republic is a landlocked country in the northwestern part of Africa. The country is the third largest producer of uranium in the world. The recent increase in the price of uranium offers an opportunity to the government to improve Niger’s human development index, which, at 0.295 in 2011 and ranking 186 out of 187, is among the lowest in the world. Increase in the demand for mineral resources such as uranium, petroleum, tin, gypsum and gold has resulted in an economic boom in Niger’s mining industry, and an increase in the effective demand for housing as well as other urban infrastructure. The country’s economic growth is driven by its agricultural and mining sectors. The real GDP growth rate in 2010 was estimated at 5.5 percent, and the prospective growth rates for 2011 and 2012 are 4.9 percent and 11.5 percent respectively, the jump being due to the rise in the prices of uranium and oil. Niger Republic started producing petroleum in November 2011. Of Niger Republic’s 16 million inhabitants, three million live in cities, making the country lightly urbanised compared to other countries in the region.  Nevertheless, 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.

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 commercial banks and an increase in branches (49 in 2009), 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 10 commercial banks, a bank of agriculture (Bagri) established in 2011 and one mortgage bank (Banque d’Habitat), created early 2011 but not yet operating. The practice of microfinance in the country is steadily growing, with about eight microfinance institutions. Capital Finance, and some others provide housing finance products.  According to MixMarket, in 2011 a total of US$9.4 million loans were disbursed to 53 511 borrowers, while there were US$4.7 million deposits by 221 308 consumers in the country. 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 a government-owned housing development company, Société Nationale d’Urbanisme Et de Construction Immobilière (SONUCI). SONUCI is still operating but CDN has been liquidated, and in 2011 replaced by Banque d’Habitat. In 2012 SONUCI developed a strategic partnership with some housing developers to build 2 000 houses between now and 2014.

A few commercial banks, such as Bank of Africa, Ecobank, BIA Niger and Sonibank, offer housing loans to employees of private companies. In most cases these companies are the banks’ clients. These are employer’s guarantee or mutual guarantee loans. Mortgages are yet to be developed. In 2011 Ecobank and the national labour union of teachers (Syndicat National des Enseignants du Niger) under the leadership of Mariama Chipkaou signed a partnership agreement to finance an affordable housing development programme for teachers all over the country. This is quite an innovative project in Niger. It is the first time that a commercial bank, that is the private sector, and a trade union, will develop a partnership to develop a housing programme for some of the employees known to be among the lowest income bracket. The initiative has had a positive impact in Niger, and other trade unions have developed similar projects with commercial banks or microfinance institutions.

This form of financing is still in its 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.  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 (Union Economique et Monétaire Ouest Africaine, UEMOA) countries, long-term funding remains the major challenge for Niger’s housing market.  Nevertheless, there are opportunities for developing national and regional mortgage banks and credit bureaus.

Affordability

Access to mortgage finance is extremely limited, and when available, interest rates and loan tenure make the cost of borrowing very high.  As such, the majority of the population cannot afford housing. The smallest mortgage available is 6.5 million CFA francs (about US$14 444), which, at an interest rate of 10.5 percent and repayable over 20 years, requires a monthly repayment of US$60.18. About 85.6 percent of the country’s population earn below U$60 a month (or U$2 a day), however, so affordability for mortgages is extremely low. 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 government officials and to some extent middle management staff in private companies, have access to housing finance. Some private but informal housing promoters use 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. The majority of the population in the urban areas rent their homes. Rental homes are provided by SONUCI, informal housing promoters and other private landlords. Rents are according to the quality and location of homes. They range from the equivalent of US$50 to US$2 500 a month in Niamey. Other forms of rentals include the popularly known rooms or room and parlour. These are found all over Niger especially in the popular streets of the capital and the average rents are between US$14 and US$60. As present no company or institution provides rentals on a larger scale. SONUCI is the only company that provide rental homes on a relatively large scale. Additionally, less than 0.1 percent of the population has access to government subsidies for housing due to the fact that only salary workers (and particularly government employees) qualify for the subsidised houses.

Housing supply

The rate of housing supply is insufficient to meet the demand, estimated in 2000 by the ministry in charge of housing (Ministère De l’Equipement De l’Habitat ET de l’Aménagement Du territoire) to be about 40 000 a year. The recent boom in the mining sector has accentuated rents and demand for houses in Niamey as well as in other cities. The absence of mortgage banks to provide end user finance is a major challenge to the development of housing.

To meet the challenge, the government is boosting supply through policies that will induce the private sector to participate in developing housing. These initiatives include public private partnership projects; the construction of low income houses such as the Sari Koubou project, financed by the government, and the Projet la Renaissance du Niger, financed by SONUCI local banks and regional financial institutions; and facilitating access to land for developers.

There are about 10 formal enterprises in the construction industry and a few in the real estate sector.  Most of these focus on land acquisition from traditional proprietors and servicing the land into plots. The serviced plots are sold to potential home owners who build their homes incrementally. The majority of the potential home owners finance through savings and loans. There are different methods of financing by commercial banks and MFIs but the most popular among MFIs consists of initial savings over three to five years for land acquisition; after which a loan is granted according to the client’s revenue and the guarantee. The loans in most cases are insufficient for building a home; therefore most homeowners build their homes over a period of time.

Housing stock in Niger can be classified in three categories, based on the material used for construction:

• Construction with mud and straws and ceiling with wood (Maison en terre);
• Construction with mud and plaster with cement, with corrugated iron sheet for the ceiling (Maison en semi dur); and
• Construction with cement, concrete, stone and ceiling with corrugated iron (modern homes) (Maison en dur).  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.

In the 40 years between 1960 and 2000, the government of Niger financed only 1 236 houses. Given this, most houses are produced through self-build. The construction of 174 government-financed houses in Niamey (Sari Koubou) in 2011 was awarded to local contractors. This project exemplifies the government’s recent work in affordable housing finance. The houses are mainly for middle-income government employees. By early 2012, construction was completed and approved by technical control.  The beneficiaries have signed the necessary documents for ownership and the houses are scheduled to be transferred to their owners before the end of the year.

Other important projects under construction include the teachers’ trade union housing programme, Capital Finance housing project, the Société Nigérienne Des Products Pétroliers (SONIDEP) villas, the customs trade union housing project and the Niger Renaissance project of SONUCI.

Property market

Property prices have risen steadily over the past five years due to an increase in demand for houses and the boom in the mining sector. The price push is exacerbated by the expectation of economic growth in 2012 when Niger starts producing and exporting petroleum.  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 commodities 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 Doing Business 2012 survey, Niger ranks 86th globally in registering property, down from 84th in 2011. 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).  At 11 percent, the cost of registration is relatively high; this is 1.5 percent above the Sub-Saharan average.

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 habitat (Politique Nationale en Matière d’Habitat: loi n°98-054 du 29 décembre 1998) was adopted in December 1998. The law defines the procedures for housing finance and the orientation for 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 relate to urban infrastructures 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 infrastructures.

In terms of urban planning and land administration, the land administration law (la Loi d’Orientation sur l’Urbanisme et l’Aménagement Foncier, 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 authority. This in turn  facilitated the registration of properties in rural areas, where it was an instant success. Prior to implementation, it was impossible to register rural lands 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 hopefully will 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 eliminated unnecessary bureaucratic authorizations.  The progress of the reform can be measured in terms of the number of Titre Foncier awarded before and after the introduction of Sheida: 150 before and 1 000 after. These figures need to be updated and the impact of Sheida needs to be assessed.

Sheida, LOUAF and the new investment code will definitely contribute to accelerating the development of housing and housing finance in Niger.

Opportunities

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 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.

Source: Housing Finance Yearbook 2012

Sources

1. Capital Finance (2012). Housing Project Capital Finance, Niger 2012: Présentation du projet de logements sociaux de Capital Finance, Niger.
2. Economic Commission for Africa (2012). African Statistics Pocketbook 2012.
3. l’Institut National de la Statistique (INS-Niger) (2010). Annuaire Statistiques des cinquante ans d’indépendance du Niger. Edition Spécial.
4. INS-Niger (2011). Annuaire Statistiques 2011.
5. Le Sahel Dimanche (2011). 16 au 19 septembre 2011.
6. Ministère de l’Equipement de l’habitat et de l’Aménagement du territoire et Cabinet du Premier Ministre, consultant Gilles Horenfel (2002).  Revue de la politique de financement de l’habitat au Niger, Rapport Final Provisoire.
7. Salissou, Malam Souley (2010). Vulnérabilité à la pauvreté au Niger, Institut National 2006. Analyse des données de l’Enquête Nationale Budget/Consommation de 2007/2008.
8. UN-Habitat (2007). Profil Urbain National du Niger 2007.
9. World Bank Data
10. World Bank and IMF (2010). Niger Financial Sector Assessment Program April 2010.
11. World Bank (2011). Doing Business 2012.