FOR Africa to tackle the challenges of real estate and sustainable development, the continent should deepen funding capabilities of financial institutions especially within sub Saharan Africa, through the creation of capital market instruments and increased access to finance.This was the submission of housing specialists at the recently concluded Rio+20 summit during a section coordinated by the International Real Estate Federation (FIABCI) Brazil Chapter, where the African President, Mr. Chudi Ubosi spoke on Real Estate Contributions and Challenges to African Sustainable Development.The International Monetary Fund (IMF) projects economic growth for the continent at 5.5 per cent in 2012, whilst in the next five years, seven of the fastest growing economies worldwide will be from the region. Real estate contributes on the average 5 per cent to the continents Gross Domestic Product (GDP) and this is key as real estate and real estate development form the bedrock of investments directly or indirectly.According to a UN Report ' the urban growth rate of 3.4 per cent for Africa makes it the fastest urbanising continent in the world and consequently by 2030 Africa will cease being predominantly rural. The increase in urban population will lead to an exponential increase in the demand for shelter and service. But as the report points out African cities are already inundated with slums and a tripling of urban populations could spell disaster unless urgent action is initiated immediatelyHe said major challenges to sustainable real estate development in Africa remains the lack of adequate infrastructure. 'Where resources are effectively and efficiently utilised with a semblance of an even spread of infrastructure development will in the long run stem the rural-urban flow and reduce pressure on real estate in the African cities. The cost of providing affordable real estate will also be reduced.'In Nigeria less than 5 per cent of the land holding is titled. Yet, there are indeed owners of these lands either traditionally or through several other forms of informal ownership. As a result of the absence of any formal title, development is greatly reduced and a lot of fratricidal wars are still fought in Africa over boundaries of land and its ownership.In the absence of title, access to developmental finance for real estate becomes impossible, impacting negatively on continued and sustainable development.In order to curb the frequent cases of conflict over land in many African States, Ubosi urged governments to focus on effective land management. 'There are many instances where long after government has compulsorily acquired land for real estate or projects of a social nature, they find it difficult to access same for a myriad of reasons ' non-payment of compensation to the land owners, payment of inadequate compensation, lack of communication and poor articulation of the government's proposal by the land owners,' he said.He also made case for good governance, as it would enure that corruption is reduced to a minimum, instability in the polity is also reduced through a judicious use of available resources. Indirectly and directly this will impact positively on real estate development.African countries, he recommended must as a matter of urgency introduce and encourage policies such as green building oriented, maintenance friendly (low cost), with uncomplicated but efficient designs that are culturally acceptable to their immediate environment. 'These policies would be geared towards ensuring that we do not use more resources than we require thereby conserving resources for the future.'FIABCI African President advised governments encourage the use of Public Private Sector Participation (PPP) as a means of achieving development. ' PPP remains one of the surest ways of sustaining real estate development in Africa, and also can serve as a means of government being able to direct development towards the low and middle income where the need is most critical and highest.'According to Ubosi, governments in Africa have developed the habit of over taxing land, and real estate developments, which resultant effect is that most owners are reluctant to hold registered titles preferring only to hold equitable interests. 'Reform of land regulations, property rights and land markets must allow private ownership, leasehold and sale transactions in an open land market.
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