Ethiopia: Addressing the housing demand through Integrated Housing Development Program

Ethiopia: Addressing the housing demand through Integrated Housing Development Program

By Bewket Abebe

ADDIS ABABA – In different towns and cities in Ethiopia, including the capital Addis Ababa, which is also the political hub for Africa, it is common to see slums. The phrase ‘the chocolate city’ has been used to describe how Addis Ababa looks like when it comes to housing. It is because the roofs of various houses are so old changing their white colors to a chocolate color. In the country of about 93 million people, about 40% is said to be still living in slums.

“If you went through the Addis neighborhoods, most of the neighborhoods are not properly designed. There are quarters that have been there for 40 years in the most dilapidated condition. The national average of slum coverage is around 40% and the Addis slum percentage is 60%; the government has a target of reducing that by half,” explains Tsedeke Yihune, owner of Flintstone Engineering, one of the largest construction companies in Ethiopia.

Through the Integrated Housing Development Program – a housing program worth of Birr 15.4 billion which is supported by the World Bank – Ethiopian government has been working to reduce slums in urban areas of the country by 50% as part of its Millennium Development Goals (MDGs).

Within the project which targets 400,000 housing units across the country, the government has delivered about half of the target to date. The project delivers housing at a cost of about Birr 3,000 (US $166) per square meter, versus Birr 5,500 (US $305) per square meter in the private sector which is still fair enough when compared to the rental prices of houses in the country. In Addis Ababa, for instance, apartments can be rented out for as much as US $6,000 per month, while other houses can go for between US $3,000 and US $4,500 per month. However more than one fourth of the delivery is concentrated in the capital city.

In addition, different housing schemes are under construction following the housing construction strategy designed by the Ministry of Urban Development and Construction (MOUDC).

The government has taken various housing development provision modalities with a view to reducing the gap between housing supply and demand prevalent in urban centers. Coupled with different road construction including the light railway project, the Addis Ababa city is under reformation which can be said to be rebuilding. Despite the attempts by the government, addressing the housing demand of the population in urban areas has become difficult for the government alone.

“There are already 900,000 people registered for this,” reveals Gebreyesus Igata, owner and general manager of GIFT Real Estate, a real estate developer in Addis Ababa.

“The only way that the government can achieve [the housing MDG] is if they get involved with the private sector in a real estate public-private-partnership and engage the people and the private sector developers from abroad or locally. We need to inject capital as well as know-how in urban design and reconfigure neighborhoods so that they can build more productive households which would translate into higher income and again, business for our housing market,” concludes Yihune from Flintstone Engineering.

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