By: Staff Writer
Namibia requires about N$45 billion over a 10-year period to address its housing backlog, but achieving the target will require coordinated planning, innovative financing and stronger collaboration between government and the private sector.
These insights were provided during a discussion on Eagle FM’s Ulwazi, where veteran economist and CEO of First Capital Namibia Dr. Martin Mwinga and property market analyst Francisco Neshila examined possible ways of financing housing developments and the challenges facing Namibia’s housing market.
The discussion comes amid the government’s ambition to deliver 50,000 houses over five years, a target the two practitioners acknowledged would require substantial financial and institutional support.
Neshila questioned Dr. Mwinga on whether the government should establish a housing bond to raise funds from both domestic and international markets.
The veteran economist noted that raising capital through a housing bond could be difficult under current market conditions because investors would demand a premium return.
He, however, argued that government support could therefore be necessary for such an instrument to work effectively.
Dr. Mwinga instead pointed to mechanisms such as mortgage securitisation and liquidity facilities, which could allow capital tied up in long-term mortgages to be recycled into the housing system.
“What we need basically is a revamp of the whole system,” Dr. Mwinga said, while highlighting mortgage securitisation as one possible approach.
He further called for greater involvement from the private sector, arguing that businesses and investors have ideas and capital that could contribute to solving the housing shortage if the government creates an enabling environment.
Dr. Mwinga also identified the Asset Securitization Act as potentially important in connecting Namibia’s capital markets with the housing sector, saying its implementation could help unlock additional financing.
The discussion also examined the impact of government housing subsidies on property values.
Neshila, drawing on property-market analysis, pointed out that a subsidised segment could be identified within the property market and questioned whether transactions involving subsidised properties accurately represent market value.
Mwinga acknowledged that subsidies can affect market dynamics.
He explained that government-supported housing can result in properties being sold below what they might otherwise fetch under normal market conditions, potentially distorting the relationship between supply, demand and price.
The discussion later turned to the N$45 billion estimated requirement for addressing the housing backlog over 10 years.
Neshila said the amount should not simply be viewed as a single sum that the government must immediately find.
Instead, he argued that the financing requirement should be considered over the full decade, with institutions such as the Treasury, NamRA, the National Planning Commission and the Ministry of Finance involved in determining how the funds could be raised and allocated.
He suggested that the initial years could focus on planning, followed by greater implementation in the later years.
Neshila also cautioned that having money available would not immediately result in 50,000 houses being constructed.
Town planning, engineering designs, infrastructure and other preparatory work would need to be completed before large-scale construction could take place.
Mwinga also called on young Namibians to conduct more research into the country’s housing market and develop new approaches to the housing backlog.
He said existing research should not be treated as a final answer, but rather as a foundation for further work, particularly in areas such as housing bonds and special purpose vehicles.
He encouraged young people interested in development and research to gain exposure to the property market and identify opportunities within the sector.
According to Dr. Mwinga, the housing market will continue to grow alongside population and economic growth, creating opportunities for those who understand the sector and can identify viable niches.
The conversation also touched on the future of First Capital and the possibility of it eventually becoming a mortgage bank.
Dr. Mwinga explained that First Capital originated from his work on mortgage securitisation and that the Government Institutions Pension Fund (GIPF) eventually provided N$100 million to test the concept.
He said the initiative subsequently grew, with the possibility of eventually transforming it into a mortgage bank.
He added that innovative ideas from other players could help determine the future direction of the institution.
Neshila and the veteran economist also examined whether the government’s target of 50,000 houses over five years is achievable.
Neshila acknowledged the boldness of the target but stressed that achieving it would require careful planning and cooperation among the country’s key institutions.
He said the N$45 billion requirement should be examined collectively, including through assessments of future government revenue and possible sources of financing.
The discussion ultimately highlighted that addressing Namibia’s housing backlog will require more than government funding alone.
Innovative financing, private-sector participation, research, proper planning and coordinated implementation will all be necessary if the country is to make meaningful progress towards its housing targets
