11:17
English speaking African countries, including Tanzania, should get rid of a 1947 British colonial housing law which has contributed in development of urban slums in most of the continent’s cities.
Oxford University economist Prof Paul Collier
He said that the 1947 Town and County Planning Act enacted by Britain’s parliament was adopted by most African countries which were colonies of the European country.”Get rid of this colonial inheritance and adopt your own standards because it’s not working here. Even if this law was enacted before London was developed, it could have led to the same problem of encouraging slums,” Prof Collier said.
He argued that the law which sets high standards of urban development favour a few rich who can afford to invest in real estate, while the majority poor are denied access to decent houses which is why most African cities are dominated by slums.
“Britain was the first country to urbanize and London grew rapidly in the early 19th century with its population increasing from one million to six million, after a short period of time partly because of building societies,” Prof Collier said.He is one of the leading economists appointed to a World Bank funded project to help address the problem of Africa’s colonial housing policy.
He also poured scorn on the hiked interest rates charged by banks on mortgage financing, saying that governments like Tanzania should do more to develop housing finance outside banks, which cannot cater for the majority poor due to their stringent lending conditions.
“You need to revive building societies or housing banks which are friendly to ordinary people, because commercial banks charge very high interest rates of up to 15 per cent which in Europe will get people laugh at you,” he said.He added that Bank of Tanzania (BoT), National Housing Corporation (NHC) and Ministry of Land, Housing and Human Settlements Development, promote a mortgage financing loan programme charging as high as 18 per cent on loans to clients.
He said in Europe banks charge interest rates which are not above ten per cent and pointed out that it is crazy to expect ordinary people to benefit from commercial bank loans, which apart from hiked interest rates have also stringent conditions.
Deputy BoT Governor Lila Mkila said that the passing of the 2010 Mortgage Financing Act which established Tanzania Mortgage Finance Company Limited, a 40 million US dollars World Bank funded loan, has opened up the housing sector to more private players including commercial banks.
“The project combines demand support using a mix of mortgage and housing microfinance instruments, with stimulation through technical assistance and capacity building,” Mr Mkila noted.He said the conference will help raise awareness and allow other African countries learn experience of developing mortgage market and promoting delivery of affordable housing.
The three-day conference is being attended by real estate experts, bankers, policy-makers and diplomats from all over the world.
By FINNIGAN WA SIMBEYE, Tanzania Daily News
