(World Bank Report) - Africa faces a major housing crisis due to rapid urbanization and a growing slum population
. New, targeted approaches to affordable housing are necessary if countries want to take advantage of the demographic shift to make cities inclusive, spur economic growth and expand job opportunities, according to a new report by the World Bank Group.
Cities are attractive for people and investment because of their agglomeration and economies of scale. The density and diversity of urban areas improves economic gains and enhances the frequency and variety of social interactions. The spatial proximity also makes the provision of infrastructure cost?effective for governments and beneficial for local economies. Infrastructure refers broadly to the physical or systems support for urban economy and society, and includes (a) aggregation of clean water, (b) sanitation and removal of human waste, (c) maintained roads107 plus higher?volume modes (e.g. trains, streetcars), (d) non?revenue social amenities (e.g. parks), (e) power supplies (especially electricity), and (f) extended coverage networks that run the infrastructure from its place of origin or collection (reservoir, landfill, hub, power plant) throughout the city. These networks can expand efficiently when marginal cost to include an additional beneficiary is low.
In SSA, such infrastructure is scarce and is directly linked to informal housing conditions found throughout the region. Regionally, less than 40 percent of all households have access to piped water, and the dearth of these amenities is particularly acute in rural regions.108 The infrastructure gap in Africa is greater than that of low?income countries elsewhere, especially when it comes to paved roads, phone mainlines, and power generation capacity.
Infrastructure has high upfront capital costs, which governments often cannot afford. Publicinvestments in infrastructure are often directed to those with land title and formal homes, such as those built by social housing programs or large private developers. Experience with sites and services programs meant to benefit the poor finds that infrastructure investments drive land speculation and eventual displacement, as middle? and upper?income groups displace lower-income groups that the interventions were intended to help.
Land is seldom used as a means to finance capital investments in infrastructure. In many cities across the world, local governments accommodate urban growth through the use of various land value capture instruments, such as fees and property taxes to pay for service provision. Yet in SSA, most cities lack the capacity to use land as a source of revenue, either through laws that prohibit or minimize land fees or taxation. Even if such laws were in place, weak fiscal cadaster records and capacities and a reliance on central government transfers reduce the ability and incentives for cities to leverage land for these purposes.
Across the region, recent data suggests that infrastructure coverage overall is actually declining. In 2010, when the urban population reached 37 percent, only 34 percent of urban residents had access to piped water, down from 43 percent in 1990. In many of the larger SSA cities, up to around 1950, developed areas tended to be fully serviced.
However, as these cities rapidly grew in the pre? and post?independence period, service provision fell behind development, particularly in the informal areas. In these areas, houses are often built before the plot is hooked up to water, electricity, and sanitation.
The sequence of infrastructure planning and investment in informal settlements is the opposite of that in wealthier neighborhoods. The formal process of plan?service?build?occupy is reversed into occupy?build?service plan. In this way, cities are being built “back to front,” as characterized in a recent study by the African Development Bank (AfDB 2015). Infrastructure coverage in SSA is mostly the preserve of upper classes, although coverage is not universal among the affluent. For the poorest 60 percent, coverage is less than 10 percent for most infrastructure services.
The cost of extending services to developed informal areas can increase the price of housing. Even in formal development, services are often promised for when development begins, but may take months or years before actual implementation. Such infrastructure costs are passed directly onto the household, which decreases overall affordability of housing. In some countries, such as Zimbabwe, government regulations restrict building until the site is connected to public services. While well?intentioned, such regulations are unrealistic and costly, and fail to address the deeper issue of weak service delivery.
Infrastructure development in SSA has struggled to keep pace with urbanization in recent decades.
Since 1990, the growth in coverage of household services in both rural and urban areas throughout SSA has been stagnant. The low population density of rural areas leads to high infrastructure costs; a basic service package costs US$400 per capita. While a basic package in urban areas costs half as much, urban areas must cope with rapid population growth, currently at a yearly average of 3.6 percent. Given current trends, it is predicted that most SSA countries won’t achieve universal access for another 50 years.
In a recent World Bank study, 7 out of 13 SSA countries in a sample of household budget surveys saw increases in infrastructure shortages. One notable exception was Uganda, which saw a 55.7 percent reduction in infrastructure shortages, particularly in drinking water and sanitation.114 Infrastructure shortages persist even as per capita national income increases, indicating that even high resource countries find it difficult to provide basic services. For example, in South Africa, infrastructure blockages are one of the reasons housing shortages persist despite generous government subsidies.
The level and type of infrastructure deficiencies vary by sub-region. For example, eastern Africa suffers most from overcrowded conditions, dirt floors, and lack of access to sanitation, but has the highest percentage of electrical connections. Western Africa has the highest housing shortages and deficiencies, while Central Africa faces the lowest housing shortages, but also low electricity connections. Further, the willingness of households to pay for various basic services varies across cities. For example, in Dar-es Salaam, Tanzania, households will pay around US$159 for an improved toilet facility; in Kigali, Rwanda, they’ll pay US$159, and in Abidjan, Cote d’Ivoire, they’ll pay as much as US$601.
Additionally, the cost of infrastructure connections in SSA is high by global standards. For example in 2013, the cost for connecting a single warehouse to a power supply in SSA was US$38,500, which was the highest in the world (Figure 21). South Asia had the lowest cost, at US$19,112.
Overall, the Africa Infrastructure Country Diagnostic (AICD) estimates that an annual investment of US$93 billion over the next 10 years will be needed to close the infrastructure gap with other regions and meet its stated development goals; water supply and sanitation alone will require US$21.9 billion a year.
Currently, Africa invests US$45 billion a year in infrastructure, two thirds of which originate from taxes and user charges. Roads and water tend to be financed via development aid from Organization of Economic Cooperation and Development (OECD) countries. Private financing, seeking the highest and safest returns, concentrates on information and communication technology in countries that are middle income or resource rich. Fragile low?income countries receive little financing from any source.