By Ian Shapiro, Chief Executive of Reall
Today my team and I will be at the launch of the inaugural Africa Investment Summit in London. The UK government want to turbo-charge relations with Africa in a post Brexit era and this Summit starts to set out the new agenda for a Global Britain.
The Summit provides a platform to demonstrate the significant multiplier effect that investment in affordable housing can have on creating jobs, building sustainable economic growth and generating opportunities across Africa. In a rapidly urbanising world this investment can lift millions of people out of poverty and boost our shared prosperity.
As Alok Sharma, the UK International Development Secretary has said: “Infrastructure is the backbone of economic growth (and we need to) catalyse private and public sector investment into projects across housing, health, education and infrastructure to benefit the poorest people.”
Uncrowded £13 Trillion Sector
Over the past thirty years, Reall has proven the catalytic power of investments in affordable housing – every £1 invested in housing can stimulate at least £2.50 of economic output, not to mention the huge positive social impact of enabling hard-working families into a decent and safe place to call home.
Africa is urbanising at an unprecedented rate. I saw this for myself when I was in Kenya late last year. It’s East Africa’s leading hub, with a flourishing and innovative financial sector, yet more than 60% of urban families live in slums. Africa currently has an affordable homes gap of 50 million, but instead of seeing this as an insurmountable problem, we see it as an opportunity to engender huge poverty reduction and a 3-6% return for investors in an uncrowded £13 trillion sector.
Commercially Viable $10K House
Reall is pioneering the construction of a commercially viable $10k house by crowding in governments, investors and African partners to build and unblock barriers to transform the housing market for the bottom 40% of the income pyramid. We do this by providing innovative housing models that can unlock the political will, capital investment and end-user finance needed to create the conditions for families on a low income to secure their own homes.
Investing in infrastructure in the form of affordable homes is the foundation of what the Africa Investment Summit is aiming to achieve. It can offer benefits for investors, a sub-commercial profit, developers – a mass volume market, and families an asset that breaks the generational poverty cycle.
Positive Social Benefits
It’s clear that the British public want foreign investments to be socially responsible for poor people and for the planet. Affordable Housing for the bottom 40% provides huge positive benefits including job creation, financial sector deepening, improved security and healthier citizens.
There is also a huge opportunity to mitigate climate change by pioneering new green energy solutions, materials, construction methods and standards which are resilient and sustainable. With 300 million new affordable homes required by 2030, UK investors and African developers can green a vast unserved supply chain by introducing renewable energy into every new home stimulating an enormous market in sustainable building materials.
Reall’s partners have tested innovative, climate-smart technologies such as low carbon bricks, renewable energy sources and bio-gas waste treatment. In Mozambique our pilot project has demonstrated effective climate-resilient construction with the homes surviving the onslaught of Cyclone Idai, whereas 90% of the city’s buildings were devastated.
Reall is passionate about the investable opportunity affordable houses presents in Africa because it’s not just a home – it’s a job-creating, gender-empowering, GDP-boosting, health-improving, climate change-fighting engine of human potential.