Land shortage dogging Tanzania housing corporation
(Mr Muungano Saguya, the Corporate Social Responsibility Manager for National Housing Corporation Photo By Kenan Kalagho)
QN: Tanzania is experiencing a massive shortage of housing and you recently introduced the mortgage finance system in partnership with seven local and regional commercial banks in the country. How beneficial is this system to the local Tanzanian?
ANS: The government reinstated the system, that has led the National Housing Corporation to sign an MoU with seven local and regional commercial banks including National Bank of Commerce, KCB, National Microfinance Bank, Exim Bank , Bank of Africa, Azania and Commercial Bank of Africa.
With this system, Tanzanians will get loans from these banks to buy new houses that will be constructed by the NHC.
QN: What role will the National Housing play to make sure that more Tanzanians own homes using the mortgage finance system?
ANS: The National Housing Corporation leads as the corporation that has been assigned by the government to provide good shelter for citizens. One of the aims is that the NHC constructs many houses to enable more Tanzanians own homes.
QN: What effects will this mortgage finance have to the economy of Tanzania and its citizen at large?
ANS:The mortgage finance system is a forum through which many citizens will have access to loans from the banks and the positive effects on this is that it will boost production of the housing industry in the country and this will in turn reduce rental charges. This will mean that the economy will grow because people will have access of loans from banks and build houses for business and therefore generate revenue for the government through taxation.
This can also have a negative impact to the economy because the housing sector is a very fragile industry, which means that if a lot of money is borrowed from banks to finance construction and these constructed houses fail to attract more customers, that will mean that the borrowed money and its interest rates charged will fail to be remitted to the banks and this might lead to the economic crunch.
QN: Recently the National housing have focused much on public-private partnership in as far as the construction of houses is concerned. Is this partnership open to all individuals willing to partner with the National Housing Corporation and what are the conditions for one to enter into this partnership?
ANS: We had this policy of public-private partnership since 1988 because we realized that the National Housing Corporation had no financial resources, but this policy was revised in 2008 and the joint venture activities were halted in 2010. This was in a bid to create a win-win situation because we realized that the National Housing was not being treated fairly in these policies. We are hoping that the policies will be revised this year and hopefully the private-public partnership will be reinstated in a more meaningful way that will benefit all the parties.
QN: There has been a negative perception about the National Housing failure to beat the growing demands of housing in the country, what expectations should the public have to the National Housing Corporation especially with the mortgage system in place?
ANS: This is true because the National housing Corporation was mandated to cater for the housing industry in Tanzania, however there were various hindrances that were holding back the growth of the national housing sector in the country like the issue where the national housing could not evict its tenants who fail to pay for their rents except with an order from the court. These laws and many others which have now been revised were a hindrance to us and for the past five years we have barely been able to construct less than 600 houses.
QN: It is said that the construction industry contributes barely 0.3% to the national economy, is there any way of reversing this trend?
ANS: We still believe that the housing sector can play a great role in contributing to the GDP of this country because housing is a business, employment and can lead someone to get capital from different banks. We believe that if the government can play its part in this sector, it can contribute heavily to the national economy. However with the new system of mortgage finance that the National Housing Corporation have signed with different local and regional banks, we can be sure of realizing this dream.
QN: The National Housing Corporation strategic plan (for 2010/2011-2014/2015) targets on constructing 10,000 houses for middle income earners and 5,000 for low income earners. Why should the target dwell much on middle income earners yet the housing demand is even worse for the low income earners?
ANS: People with low income need to have subsidy that means that the profit that will be obtained from the 10,000 houses that will be constructed for the middle income earners will be used to subsidize the low income earners and if the profit beats the margin then the number of houses to be constructed for the low income earners might also increase.
QN: The country celebrated 50 years of its independence in December. What would you say are some of the challenges that you have faced during the period?
We have survived but face challenges like the scarcity of land. There has also been a negative mindset of most Tanzanians to see the National Housing Corporation houses being rented or sold at a low cost. This mindset needs to be reversed.
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