Mass Housing Scheme Off the Ground [column]

DURING November last year, President Hifikepunye Pohamba officially launched the ambitious mass housing development programme.

In line with the government’s Vision 2030, a strategy document that outlines the government’s long-term development objectives – the programme plans to build 185 000 affordable houses by the year 2030, which will be implemented in phases at a projected total cost of N$45 billion.

According to the blueprint on mass housing development initiative in Namibia, published in October 2013, the main objectives of the programme include: 1) provide affordable housing to the Namibian people 2) economic empowerment through ownership of a tradable asset (a house) that can be used as security for further wealth and asset generation at household level and 3) creating jobs and stimulating economic growth. The programme aims to create 20 556 new jobs by 2030. The first phase of the project, estimated to cost in the region of N$2,7 billion, is to be facilitated over the course of two years and plans to build 8 800 housing units across all 14 regional capital centres, while 10 200 plots will also be serviced during this time.

Why do we care? It might be too early to gauge whether the project will in fact remain on track and, as such, be able to complete the 8 800 units by 2016 as originally envisaged. Regardless, besides the obvious socio-economic and employment creation related benefits, the project will also serve to support an expansion in the construction sector, which we believe will be one of the main drivers of economic growth this year. The country’s real GDP growth reached 1,6% year on year in the first quarter, down from 4,9% year on year recorded in the last quarter of last year.

Looking ahead, our optimism relating to a g recovery in the mining industry, a key driver of economic growth in recent years, has tempered of late due to falling uranium prices. Also, a higher interest rate environment could aersely affect growth in the wholesale and retail trade industry. With household debt as a percentage of disposable income estimated at 78% by the end of 2013, higher interest rates will add even more pressure on consumer spending. Thus, Namibia’s economic growth prospects this year might become increasingly dependent on a g expansion in the construction sector. Fortunately, the fact that the mass housing programme has taken off bodes well in this regard.

Brian van Rensburg is a director at PSG Namibia

Source : The Namibian