SENEGAL – Senegal’s Sovereign Strategic Investments Fund (FONSIS) has partnered with International Finance Corporation (IFC) to enhance the supply of affordable housing in Senegal.
The partnership will develop 20,000 housing units for the next 8 to 10 years through a special fund called Kajom Capital.
Under the agreement, IFC and FONSIS will acquire homes from developers and make them available to low-income people through a hire-purchase system, helping thousands of Senegalese realize to own their own homes.
In Senegal and other countries in Africa, property developers are often reluctant to build cheap housing because potential buyers of such properties find it difficult to save or borrow the funds required to make a down payment and buy their accommodation.
Initially, the project will support the construction of 200 housing units in the Dakar region. In the long term, approximately 120,000 people are expected to directly benefit from this initiative, which will also create many local jobs in the construction sector.
“In addition to accelerating and promoting access to the property, the lease-purchase fund will encourage Senegalese to save and better plan for their retirement and the education of their children,” said Papa Demba Diallo, CEO of FONSIS.
“Increasing Senegalese’s access to affordable, quality housing is essential to improving people’s daily lives and fostering economic and social progress,” said Makhtar Diop, CEO of IFC.
“IFC is proud to partner with FONSIS to help address the shortage of affordable housing supply in Senegal through an innovative, private sector-led solution.”
The rapid population growth in Dakar puts great pressure on the supply of housing, especially when it comes to affordable housing.
It is estimated that there is a shortage of around 160,000 homes in the Senegalese capital and 370,000 across Senegal.
The project is expected to benefit from an initial investment from IFC of approximately US$10 million in the medium term and more than US$50 million in the long term.
IFC and FONSIS hope to mobilize and attract other institutional investors – national and international – to support the project.