Uncategorised

Govt negotiates for funding to roll out housing project

03 Jul, 2020 - 00:07 0 Views
Govt negotiates for  funding to roll out housing project Minister Daniel Garwe

The Chronicle

Mkhululi Ncube, Chronicle Reporter
GOVERNMENT is negotiating for funding to roll out massive housing projects and an African financial institution has since availed US$65 million to be utilised by local building societies.

The country has a national housing backlog of 1,5 million.

Due to a number of challenges, a number of home seekers have been duped by land owners, but Government has since taken a decision to stop offering land to land barons.

In recent years, land barons, individual land developers and cooperatives have been at the forefront of land development for housing but the schemes resulted in chaos and corruption, leading to the sprouting of illegal settlements. Authorities are working on regularising some of the settlements.

National Housing and Social Amenities Minister Daniel Garwe yesterday told a meeting of local authorities from Matabeleland North Province that his ministry is engaging various partners to fund the construction of houses.

“We spoke to Pan African banks and two banks that are critical to us and registered a statement of interest are Shelter Afrique and Afreximbank. Shelter Afrique has gone to the extent of providing lines of credit to our building societies to the tune of US$65 million dollars for social housing. Their mandate is to provide affordable finance for social housing and Zimbabwe is a shareholder in that bank and its Chief Executive Officer is a Zimbabwean. We are fine tuning paperwork. Money is there what I am appealing to all of you is to have the will power. Let us develop our country,” he said.

The Minister said various local funding mechanisms are also under consideration so that people benefit from the provision of houses.

“We have several sources of funding starting with the Ministry of Finance but we have gone to the private sector to look for funding and we have got it. We have approached financial institutions, pension funds and insurance companies in this country and we have told them that we want them to participate in the provision of human settlements.

“Government does not have all the financial muscle to fulfill this huge task but we have the land and the financial institutions have the money,” he said.

The minister said banks have to transform their housing mortgages taking into account the economic environment.

He said they had engaged building societies whom they told that their mortgage facilities are no longer applicable given the economic environment in the country where 70 percent of the businesses are in the informal sector.

The Minister said pension funds have not been involved in the construction of houses to benefit members, something that must be addressed.

“The Act that governs pensions funds allows them to plough back 20 percent of their profits into social housing. We have called them on board and told them that we do not want their money but a relationship and concepts that ensures that we are equal partners in the development programs. They will bring the resources and we will create a special purpose vehicle whose shareholding will consist of stakeholders from the ministry and them.

“They will come with money and us with land at intrinsic value so that we make sure that the cost of housing is affordable,” he said.

Minister Garwe said they have also engaged mining firms so that they build houses for their workers by providing funding while the ministry provides the land.

He said there must be affordable housing taking into account climate change.

The minister challenged local authorities to come up with modern housing designs that will also address land usage taking into account that the country uses much of its land for agricultural purposes. “Every development program that is going to take place now must have a deliberate portion set aside for vertical construction, four, five floors of flats both in the rural and urban areas so that we preserve our agricultural land, environment and our forests,” said the minister.

The minister said his Ministry will ensure that civil servants are able to participate in rent-to-buy schemes.

He said it was unfair for civil servants to be renting for years when a concept can be developed working with financing institutions that are helpful to them.

Share This: