Nigeria Raises Stake in Pan-African Housing Development Firm with N3bn Additional Capital

Emmanuel Addeh in Abuja

The federal government has increased its stake in pan-African housing development financier, Shelter Afrique with about $3.003 billion or $7.15 million in additional capital subscription.

The additional capital subscription at conservative official dollar/naira of N420 to $1, places Nigeria just one per cent  behind top shareholder,  Kenya, a news medium based in the East African country, busiweek, stated yesterday.

Shelter Afrique, headquartered in Kenya, says it’s the only pan-African finance institution that exclusively supports the development of housing and urban development in Africa.

The organisation is a partnership of 44 African governments, the African Development Bank (AfDB) and the Africa Reinsurance Corporation (Africa-Re).
Added to Nigeria’s new payment, the company also received more capital subscriptions from Swaziland and Burkina Faso.

The increase in stake now takes Nigeria’s shareholding to 15.8 per cent, one-percentage point behind top shareholder Kenya, which currently stands at 16.85 per cent.

The other top three shareholders of Shelter Afrique whose shareholdings have now changed include AfDB, which now stands at 12.16 per cent, down from 12.71  per cent; Mali at 5.3 per cent, down from 5.54 per cent; and Ghana at 5.05 per cent, down from 5.28 per cent.

Acting Managing Director and Chief Finance Officer of the organisation, Kingsley Muwowo, was quoted to have lauded the government of Nigeria for its show of confidence in the institution.

He said the move now places Nigeria in a good position to become the largest shareholder in Shelter Afrique when the country fully meets its capital commitment.
“We are grateful to the government of Nigerian for their continued support and the importance they have placed on affordable housing.

“We are especially grateful to the Honourable Minister for Works and Housing Babatunde Fashola, Honorable Minister for State, Engineer Abubakar Aliyu, and Honorable Minister for Finance Dr. Zainab Shamsuna Ahmed, for their long-term support and for honouring this significant payment.

“Additionally, we appreciate Nigeria’s active shareholder and board participation,” Mr. Muwowo was quoted to have said.  

The relationship between Nigeria and Shelter Afrique has been growing in recent years. In September 2020, the institution received $9.4 million additional capital subscription from Nigeria.

Other countries that have so far ramped up capital subscription in the Pan-African housing development financier in 2022 are Swaziland and Burkina Faso which paid $317,854.54 and $34,610.00 respectively, for additional stakes.
“So far, we have received $7,504,295.45 in additional capital from member states within the last six months of 2022.

“We are grateful to our shareholders for this much needed capital injection which will go a long way in strengthening the capital structure of the company to support the ongoing fund-raising efforts to raise additional debt capital required to support project pipeline which now stands at $1 billion across 44 member countries,” Mr. Muwowo said.

Shelter Afrique recently completed a debut N46 billion ($110.7 million) Series 1 fixed rate senior unsecured bond issuance in Nigeria’s capital market under its N200 billion (US$481.3 million) bond issuance programme for housing and urban development in Nigeria.

The company plans similar bond issuance in East African markets including Kenya, Uganda, Tanzania and Rwanda.
Earlier in the year, the firm announced that it was in the middle of a restructuring programme aimed at lifting the institution from a financial abyss, leading to the sack of its erstwhile chief executive, Zimbabwean national Andrew Chimphondah, whose contract was scheduled to have run until 2024 from September 2018.

The exit of Chimphondah from the business followed a board decision that appointed its  Chief Finance Officer, Muwowo, to take over the position in an acting capacity, pending the recruitment of a substantive managing director.

Shelter Afrique fell into the loss making territory in 2015 following alleged years of mismanagement that led to the ouster of the former Managing Director, James Mugerwa, over allegations of financial impropriety and governance issues.