Strong foundations: A framework for assessing the role of the insurance sector in property market development
The housing shortfall in Africa is immense. For instance, the World Bank (2017) estimates that across eight countries in West Africa about 800,000 new housing units are needed every year to address the housing shortages in those countries. Yet, banks in these countries collectively only issue 15,000 new mortgages per year. Similar shortages also exist in the commercial and industrial space. This missing market continues to be a huge burden on Africa’s economy, depriving it of employment opportunities, investment, asset building, and more resilient communities. Unlocking and catalysing the property market is a policy imperative in Africa. A new report from Cenfri and FSD Africa seeks to understand the role that insurance can play to support property markets. It looks at the role of insurance in managing and transferring risks associated with property development, as well as the role of insurance in capital intermediation to overcome extensive financing constraints.