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(The Economist) For most urban Africans, owning anything other than a slum home is out of reach

LAGOS, the congested commercial capital of Nigeria, has a population variously estimated at anything from 12m-21m. But what is certain is that people are moving to the megacity and its smaller counterparts across the continent in droves—and not into brand new flats with recently acquired mortgages.

With around 40% of its people living in cities, sub-Saharan Africa is the world’s least urbanised region. But it is changing fast: the UN predicts that its urban inhabitants will more than treble in number to 1.1 billion by 2050, accounting for 56% of the region’s population. By 2030 Dar es Salaam, Johannesburg and Luanda will have joined Kinshasa and Lagos as megacities, each with more than 10m people.

Most of that growth will be in slums, which are currently doubling in size every 15 years while they shrink in many other parts of the world. They’re not always cheap to live in, either. Economists at the Massachusetts Institute of Technology found that in Kibera, a Nairobi slum, residents devoted almost a third of their non-food expenditures to rent. More than 90% of them are tenants. In Kenya’s countryside, by contrast, 90% of households pay no rent at all, typically because they built their own shelter on informally owned land.

Rural migrants who want to take advantage of the opportunities Africa’s cities have to offer often have no choice; formal housing is unaffordable in most countries. The cheapest new, privately-built formal house in Ethiopia cost $68,783 in 2013, according to the Centre for Affordable Housing Finance in Africa, a South African non-profit. A 100 square metre state-subsidised apartment sold for $16,600, 35 times the average Ethiopian’s earnings (by comparison, in Britain the ratio is around five times). Even in Mali the cheapest legally-built private homes in the region, at $5,800 (plus another $1,000 to $4,000 for land, depending on location) are out of reach for most.

It is no surprise that sub-Saharan Africa has the smallest mortgage market in the world. Just 3.7% of adults in urban areas had any type of home loan in 2011, according to a World Bank report released this week. The value of Nigeria’s mortgages more than quadrupled between 2006 and 2011, but was still equivalent to no more than 0.5% of GDP, compared with more than 25% in South Africa.

That won’t change until more of the region’s land is registered (just 10% was in 2013) and the tangles of state and customary ownership are resolved. Rwanda’s computerised land registry is the kind of reform that might help. It cut the time it takes to transfer a property from a year to a month. Countries from Ghana to Uganda are trying similar reforms. African cities will also have to invest huge sums in sewage systems, roads and other infrastructure if they want to house the millions of people who are likely to move there in the coming years. In the meantime Africa’s slums will continue to swell.

The article was published on The Economist.

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