In the last ten-year, Sierra Leone has made some gains in terms of economic performance. However, this economic gain has not been sustainable given the fact that access to basic services such as health, education and housing continues to be aproblem.
Housing is an important part of the Sierra Leone economy but it provision remains a huge challenge. Therefore,this project looks at housing problem, the need for investing in housing and possible solutions to mitigate this problem.
The target audience include policy makers, investors and nonprofit making institutions and anyone interested in achievingthe SDGs.
Reducing poverty the role of housing in sierra leone
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DEVELOPMENT FINANCE IMPACT PROJECT – DIGITAL ARTIFACT
REDUCING POVERTY: THE ROLE OF HOUSING IN SIERRA LEONE
BY
RASHID ORTOLE KARGBO
2017
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1. Background
Sierra Leone is one of the smallest countries in West Africa with a population of seven (7)
million (Statistics Sierra Leone (SSL), 2016) and a GDP per capita of 631.3 USD (World
Development Indicators (WDI), 2017). It covers a total area of 71,740 sq km, neighboring the
North Atlantic Ocean between Guinea and Liberia. The country became a fragile state as a result
of the eleven (11) years of civil war that caused tens of thousands of deaths and
displacement of over one third of the population (The World Factbook, 2017).
In the last ten-year, the country has made some gains in terms of economic performance.
However, this economic gain has not been sustainable given the fact that access to basic services
such as health, education and housing among others continues to be a major problem.
Housing is an important part of the Sierra Leone economy. However, housing provision has been
an acute problem of the country. For instance, the country’s capital city Freetown is a wonderful
city surrounded by natural environment but there have not been enough homes to meet the needs
of the growing population. Anyone wanting to rent/lease an apartment or any other type of
housing in Freetown is in for a cumbersome task.
By tackling housing problem, the government will make significant gains in achieving goal
eleven (11) of the SDGs. That is, to make cities and human settlements inclusive, safe, resilient
and sustainable. Smart spending on housing, especially on low-cost housing will also help in
achieving the health; education; jobs creation and economic growth; and infrastructure goals.
This paper looks at housing problem in the country, the need for investing in housing and
possible solutions to mitigate this problem.
2. Housing problem in Sierra Leone
In Sierra Leone, the provision of housing particularly for low and middle level income
individuals and families is under the authority of the Sierra Leone Housing Corporation
(SALHOC). As at 2015, there were a total of 801,417 houses in the country with approximately
8.8 persons per house; about 70 percent of population with no house, land or car; and nearly 61
percent living in rented houses (SSL, 2016; SALHOC, 2016).
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About 40 percent of the country’s population live in urban areas with an annual growth of 3.8
percent (WDI, 2017; SALHOC, 2016). The upsurge in urbanization has led to many informal
settlements and slums which hold about 75.6 percent of the urban population (WDI, 2017). The
upsurge in migration from other urban, peri-urban and rural dwellers has posed huge challenges
in the management of utilities and other amenities and added pressures in the demand for
housing. This has contributed to the housing poverty in Sierra Leone.
Despite the growing demand for housing, private and public institutions have failed to provide
enough units to meet this ever-growing demand. On the side of the private sector, this may be
due to highly perceived risk, high transport cost and infrastructure bottlenecks which increase
production cost, information asymmetries and coordination problem making investment difficult.
In the midst of other developmental and social requirements, public financing has not been
adequate to solve housing problem in the country.
3. The need for investing in housing in Sierra Leone
The broader economic gain from housing investment differs by the type of housing investment.
Housing investment takes the form of upgrading or renovating of existing houses, construction of
traditional and low-cost housing and the building of conventional and luxury houses. Among
these different types of housing, low-cost housing is viewed as a better employer than luxury and
high cost housing because it utilizes a significant amount of locally produced building materials
and low-skilled labour (Tabaijuka, 2013).
Investing in housing immediately create income and employment thereby bringing immediate
benefits to those who are employed as well as those who will be users of the constructed houses.
For instance, to undertake a low-cost housing project, workers must be hired, supplies ordered,
bulldozers rented, lumber purchased, etc. All of these economic activities generate further
economic activity and provide revenues for the government. Revenues can be in the form of fees
for permitting, zoning, and utilities or they can reflect sales, income, or property taxes generated
by construction-related economic activity (Cohen, and Wardrip, 2014).
Constructing reasonably priced housing can help reduce crime rates, especially among young
homeless people. Also, it will reduce overcrowding which may positively affect educational
outcomes for children, say by improving their health and wellbeing.
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In Sierra Leone, university students find it very difficult to get accommodations. University
hostels are not enough and as such, parents/students have to pay excessive prices to secure
accommodations in nearby campuses, some of which may not be appropriate for academic
purposes. Therefore, building student accommodation especially by private agencies will bring
greater return to the investors and at the same time create employment and reduce pressure on
government budget.
4. Solution to the current housing problems
It is imperative on the government, private agencies and international development institutions to
set the country on a sustainable path through housing financing.
In order to realize the importance of housing in economic development, the government needs to
formulate and in other cases review specific housing policies and institutional frameworks to
foster efficient and adequate functioning of the housing system both in terms of home ownership
as well as rental housing.
In addition to investment incentives in the mining, agriculture, and road construction sector, the
government should create incentives to help promote the renovation and construction of new
housing facilities particularly low-income housing and student accommodations. Specifically,
government can use tax credits to encourage a broader range of investors to build houses for
private rent. However, care is needed to avoid misuse of this facility.
Furthermore, the high cost of acquiring land presents a major barrier to the development of
inexpensive homes especially for non-profit developers who lack up-front capital. Therefore, the
government and local councils should endeavor to remove unnecessarily complex regulations in
acquiring lands and provide finance for projects that cannot progress without it. Also, most
municipalities control significant amounts of land hence they can play a role in identifying
unused, underutilized, or surplus land that may be appropriate for residential development and
transferring ownership at low or no cost to entities that agree to create affordable housing
(Cohen, and Wardrip, 2014).
Finally, business men, communities and non-profit organizations can form a partnership to
generate capital for the construction of low-cost housing without raiding government coffers or
diverting resources from other development programs.
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5. Conclusion
Achieving the SDGs require concerted efforts. One way to meet these goals is by providing
affordable settlements. As discussed in this paper, the construction of houses particularly
affordable ones have multiplier effects including increasing output, income and employment
among others. In this regard, both the public and private sector should focus on financing and or
investing in housing in Sierra Leone.
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Thank you for taking your time to review this work
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