In a recent meeting with his cabinet of ministers, Ethiopian Prime Minister Abiy Ahmed confirmed that the country is prepared to allow foreign mortgage banks entry into the Ethiopian housing market.
During his statement the Prime Minister affirmed the need to address the country’s housing crisis, especially in the capital city, Addis Ababa. He said that one of the avenues that the government can look to, besides its own policies, is the banking sector.
The move might signify that Ethiopia is willing to open its banking sector to foreign companies and investors. Over the past few months, many international financial organizations and experts had criticized the country’s unwillingness to liberalize its banking sector.
The Ethiopian government estimates that 1 to 1.2 million houses need to be built annually to meet the growing demand for housing in urban cities and towns, according to the Prime Minister. Recent reports show that at least 70 percent of housing units in Ethiopia need total renovation and only 20 percent of housing units have adequate sanitation.
Eighty percent of Addis Ababa falls within the ‘slum’ category, according to a report by Habitat for Humanity.
Earlier this week, in an attempt to address the lack of sufficient housing units, Addis Ababa Deputy Mayor Adanech Abiebie pledged her administration’s support for all real estate developers. Her administration even signed an agreement with Gojo Bridge Housing Trading PLC for the construction of 1,000 housing units within a year’s time.