Your Excellency, Umaru Musa Yar’Adua President of the Federal Republic of Nigeria,          
Your Excellency, Dr.Goodluck Ebele Jonathan, the Vice President of the Republic of Nigeria.
Excellency, Mrs. Halima Tayo Alao, Minister of Environment, Housing & Urban Development, 
Excellency Mrs.  Lindiwe Sisulu, Minister of Housing, Republic of South Africa and Chairperson of the African   Ministerial Conference on Housing and Urban Development,
Excellency, Chief Chuka Odom, Minister of State, Federal Ministry of  Environment, Housing & Urban Development, 
Excellency Ministers from Member-States of the African Region,
Dr. Kebede, Representative of the Commission of the African Union
Distinguished Dignitaries,
Colleagues from the United Nations System,
Invited Guests,
Ladies and Gentlemen,

I would like to thank your Government, Mr. President, for inviting UN-HABITAT to participate as a co-organizer of this Second African Ministerial Conference on Housing and Urban Development. On behalf of my staff as well as on my own behalf, I wish to express sincere appreciation for the warm reception and the legendary Nigerian hospitality accorded to us. We are very pleased with the excellent arrangements that have been put in place for conducting our deliberations at this meeting.  Indeed, we have always looked forward to coming to this beautiful city and witness the great strides your Government and the people of this country are making in confronting the challenges of urban development.

Allow me, Mr. President, to pay tribute to honourable Ministers and their delegations from the various African countries who have come to Abuja. Your presence at this meeting bears testimony not only to your commitment to the agenda of this conference, but it also demonstrates the importance you attach to the institution of AMCHUD that you have created three years ago.

I would like to specially recognize the presence of the representative from the Commission of the African Union. AMCHUD is highly privileged to have been founded in Durban, South Africa, under the auspices of the continental body – the African Union. Indeed, it was the inspiration derived from Decision 29 of the Assembly of Heads of State and Government of the African Union, at its Maputo Summit in 2003 that led to the creation of this Ministerial conference. It is therefore appreciated that the Commission has all along been supportive of the AMCHUD’s initiatives and has been encouraging ways of promoting closer collaboration. UNHABITAT considers the AU as the ultimate patron and custodian of in  further development and strengthening of this institution.

Your Excellency Mr. President
Distinguished Ministers
Ladies and Gentlemen

From the Durban founding conference in February 2005; through the Special conference in Nairobi held in April 2006; to this Second ordinary conference here in Abuja in 2008 – AMCHUD has come a long way. It has not only become a powerful vehicle for promoting the agenda of sustainable human settlements but it has also enhanced the voice of African Ministers of housing and urban development in global forums. The quest to forge collective endeavours and the pursuit of African interests and concerns has been a distinctive hallmark of this dynamic institution. I wish to note that it is difficult to separate these achievements from the exemplary leadership that has been provided by my dear sister Madam Lindiwe Sisulu, Minister of Housing of the Government of South Africa, and the current Chairperson of AMCHUD.

Mrs. Sisulu has not only steered the Bureau and provided superb front-line leadership, but she also offered the facilities of her esteemed government in hosting the Secretariat and contributed substantially to the convening of the Special conference in Nairobi, together with the Government of the Republic of Kenya. In today’s world, where every government has to budget for increasing demands from its citizens in an increasingly challenging economic environment, the contribution of the Government of South Africa to AMCHUD is, therefore, immensely appreciated.

I ask you therefore to join me, your Excellencies, in giving a big hand of thanks to Minister Sisulu, her Government and the people of South Africa for their great contribution in establishing the Secretariat and turning it into a smoothly functioning operation over the last three years.  Madam Sisulu, and her able Bureau, consisting of Honourable Ministers from Kenya, Algeria, Senegal, Chad,  have made all of us  very proud to be associated with this organization.

Thank you.  We all look forward to other countries emulating the commitment of South Africa in addressing housing issues.

Your Excellency Mr. President
Honourable Ministers
Ladies and Gentlemen.

The timing of this conference, in relation to the theme being addressed, is quite significant. The world as a whole is passing through a triple crises whose repercussions, particularly to the urban centres and the populations within them,  are  quite profound.  I am here referring to the global crises of food, energy, and housing whose effects are so pervasive that they have caused not only riots and protests in developing countries but they have destabilised even the most robust economies. The crisis in sub-prime mortgage lending in the USA has caught that might country by surprise, and has already unleashed a negative contagion throughout a number of developing countries, leaving  behind  ruined capital markets, destroyed financial stability within households and financial institutions alike, and messed up productive assets. Rising prices of food and fuel are increasingly eroding the gains achieved in the last decade, exacerbating the plight of the urban poor, and posing a great challenge for urban management. A number of African counties represented here today have already witnessed food riots and Governments as well as relevant UN agencies have been forced to come in with extra ordinary measures to avoid social disharmony. It is therefore very timely for African Ministers of Housing and Urban Development to address the issue of financing urban development and the broader ramifications.

Perhaps one should also mention that the timeliness of the conference is not simply because Africa, as part of the global dynamics, is also severely impacted by the triple crises.  While to some extent this may be true with respect to the food and energy crises, in the case of housing the contrary is the case. Africa has been in an endemic housing crisis both in quantity, quality and macro-economic impact.  However, the recent experiences of the United States and Europe provide useful lessons and insights to African policy makers on the importance of political will as well as on the power of the housing sector and its inter-linkages with other critical areas of socio-economic development.  Allow me to briefly illustrate this by citing the case of mortgage finance institutions in the American context.

The mortgage market was created with the intention of boosting homeownership through extending the opportunities to average income earners. Two institutions - Fannie Mae and Freddie Mac hold about half of the total USD 12 trillion mortgage loan portfolios. They are the driving forces for the development of American housing finance and indeed the American economy. In our 2005 Global Report on Human Settlements, we showed for example how 72% of American GNP is held as mortgage finance!.  Until the recent crisis such innovative housing finance instruments have helped millions of people to realize their dreams to have decent homes. Fannie Mae and Freddie Mac purchase mortgage loans from credit institutions and issue mortgage-based securities and provide guarantees for mortgage loans. This way lenders or banks can quickly get their funds back and lend to others, as mortgagors pay over long periods of time, up to 40 years. The approaches adopt by them help to mobilize resources globally through securitization and increase the housing finance access to average income people through guarantees. This is how the system was designed to work. Ordinary banks give loans for housing on the understanding that these so called Government Supported Enterprises (GSEs) are the guarantors. To put it simply, the arrangements allowed housing to function like any other commodity on the market, to be easily traded, albeit with long term finance. The system has worked very well and promoted broad spectrum prosperity. However, in the more recent past, things were sort of left on the loose and loans extended to low income household outside this official  system, without these minimum guarantees. This is the so called sub-prime mortgage, loans given to low income households who could not fulfill standard qualification criteria, normally between 10-20% down payment and a test for affordability test to be able to service the loan. Assisted by an easy inflow of capital from the global stock market (read globalization), lending was extended to low income households without fulfilling the minimum criteria, and often under predatory conditions of very high interest rates. As this system has faltered, the contagion has unleashed  a credit crunch that has reverberated throughout the economy threatening a global recession.

The manner and speed with which the US Government has acted to contain the crisis should inform this region in general and this AMCHUD meeting in particular of the centrality of housing in a market economy. Quite appropriately, the Housing Bill has been rushed through Senate and Congress and the President accented to enable government to intervene and save more households from impending foreclosure. Earlier, you might have hear how in the UK, the Government of Prime Minister Gordon Brown  had  come in to the rescue of mortgage lender Northern Rock.

In short, as it has turned out, the sub-prime lending crisis has not only broken the dreams of individuals but also threatens the very foundation of modern housing finance systems in the developed nations. The  lesson for Africa  is first, to take note of the important role of Government in the sector of Housing and Urban Development. The USA prides itself with having lean government and they have reason to  be. However, take note that of the only 15 ministerial positions in the US system, one is deserved for Housing and Urban Development. In the case of the African region, it is not always guaranteed that the housing and urban development portfolio would get the attention it deserves. In this regard, let me extend my gratitude to those African Heads of state that have headed our call and campaign to have this sector given due recognition, and visibility on the cabinet table.

The second lesson from the current housing finance crisis is the need to build institutions, including Government supported enterprises, and to build the requisite capacities for resource mobilization, including facilitating access to critical resources such as land. The housing and urban development sectors cannot just be left to the market without supportive institutions, without appropriate regulations and regulators. There is no place where this laissez faire policy has worked. And if laissez faire has not worked in the developed nations who pay serious attention to the sector, why should Africa be the exception?. In 2005, the Commission for Africa established by former UK Prime Minister Tony Blair, and on which I had opportunity to serve,  reached a conclusion that after HIV/AIDS, the next  biggest challenge facing Africa is rapid chaotic urbanization as  a result of rural poverty and conflicts, but also accelerated by environmental deterioration. We  now know this will become worse because of the reality of climate change. Imagine the spectre of rising sea levels on the coastal cities of Africa, such as Lagos, Dakar, Dar es Salaam, Duola, Accra, etc, or advancing desert frontiers on cities such as Khartoum. I urge this august assembly that ours is an agenda that must be confronted on war footing, since time is not on our side. We must plan our settlements already in crisis also for more difficult things to come!

Against this somber backdrop, quite appropriately, this conference gives special attention to financing slum upgrading, prevention and the delivery of affordable housing.  In this respect, the conference brings to the fore not only Target 11 of the Millennium Development Goals - referring to achieving significant improvements in the lives of slum dwellers, but also Target 10 on safe drinking water and basic sanitation.  We are now passing through the half way mark on achieving the targets for improving the physical and social dimensions of slum prevention and upgrading. The prognosis on Africa’s achieving the MDGs within the designated time-frame has not been encouraging. This meeting is therefore important for its being proactive and action oriented in terms of addressing the financial component, which is a critical ingredient for achieving the MDGs.

Furthermore, when addressed collectively as this conference endeavours to do, financing housing and urban development promotes the NEPAD agenda in general, and the NEPAD City Programme specifically.  In the next two days you will, hopefully, be exploring ways of embarking on shared actions aimed at promoting infrastructural development, which is a key component of NEPAD.

Your Excellency Mr. President
Honourable Ministers
Ladies and Gentlemen.

One cannot overstate the challenge of urbanization and urban development in Africa and what it entails for financial resources.  The UN-HABITAT estimates show that Sub-Saharan African countries display the highest urban slum households in the world with figures varying between 60% -70%. Contrary to conventional wisdom, we now know that slum dwellers are just as vulnerable as their rural counterparts to the incidence of hunger, diseases and have less education and high unemployment rates.

In many cities of Sub-Saharan Africa, slums are emerging as a dominant and distinct type of settlement. Urbanization has become virtually synonymous with slum growth. Northern Africa is the only sub-region where slum growth rates are declining, largely due to positive measures taken by individual countries to address the plight of slum dwellers. Governments in this region have taken the lead to promote decent housing.

In Nigeria as with much of Africa, urban growth rates and slum growth rates are almost identical at about 4 to 5 % growth rate. The growth of slums for Nigeria is 4.23% with an urban population in 2007 of 50%. However, access to safe water is only 62%, improved sanitation is 54% (urban 66%; rural, 49%). There is a housing deficit of 8 to 12 million, about 7 to 8% of the population have no homes. Both Lagos and Kinshasa will reach populations of 12 and 11 million people respectively by the year 2025 yet urbanization has been as chaotic as our planning for meeting mega cities challenges have been ad-hoc and haphazard.

Translated into reality, these figures mean that well over half of our continent’s urban populations lack one of the five basic conditions of what we refer to as decent housing. These are adequate sanitation, improved water supply, durable housing, adequate living space and secure tenure. Even if the rate of slum formation drops, we need to be under no illusion that the continuing fast expansion of towns and cities will make it difficult to improve living conditions quickly enough to meet Target 11.

In sub-Saharan Africa, looking beyond the overall regional statistics, the situation is acute. In countries like Chad, the Central African Republic, and Ethiopia, for example, four out of five urban dwellers live in slums.  Living at more than three persons to a tiny room, with no or limited access to toilet facilities or water and at risk from indoor pollution caused by use of open fires for cooking, there are high levels of morbidity and mortality, especially for women and children. Such deprivation means that most of our city children cannot dream of a good education, let alone employment afterwards because they have to survive the hazards of malnutrition and disease that threaten and take the lives of so many of our young people every day.  When asked of her dreams, a young girl in a Nairobi slum replied, and I quote, “to marry a man who has a house with its own toilet”.

We all know that this situation can pose a threat to our social fabric. AMCHUD II will need to agree on a resource and finance mobilization strategy for governments and institutions to achieve the housing MDG target.

Honourable Ministers, you will recall that the Habitat Agenda commits Member States to strengthening existing financial mechanisms through the development of innovative approaches. These include the mobilization of resources from public, private, multilateral and bilateral sources. They also include local institutions involved in microcredit and cooperatives. We are well aware of the difficult situation our governments face in mobilizing housing finance. We are also all too aware of the constraints in meeting budget requirements for other equally pressing needs. Nonetheless, I strongly urge you to critically re-examine the  role of housing in the overall macro-economic of your countries and in improving the well-being of your people.

In the past, housing was often considered a non-productive good that constituted a burden to rapid economic development. Consequently, most policy-makers assigned a low priority to housing in their national development strategies, or ignored it altogether. It is now firmly established that housing can be a critical lever in modern economic development. Investment in housing as well as an efficient handling of the housing supply, development and access system, generates a higher multiplier effect to the wider macro-economic and social system. Housing contributes to employment, growth, incomes, savings and asset formation, productivity, as well as to improved welfare.  A robust housing and construction sector is the fastest means to provide employment to unskilled migrants newly arrived from rural areas thus to save poverty. But you will be surprised how difficult it has been to include housing and urban infrastructure in the PRSPs and the UNDAFs!. As you might be aware it has taken a concerted campaign by UN-HABITAT to deal with this  glaring omission.

The positive correlation between housing investment and economic development can be enhanced by effective fiscal and financial systems appropriately customised to reflect the local context. Well designed systems of housing finance can have a major benefit in promoting economic development.

Excellency Mr. President
Honourable Ministers
Ladies and Gentlemen.

There is evidence that with the right policies and focused strategies, housing finance can be mobilized and applied to change the condition of the poor in Africa. For example, since 1994 South Africa has demonstrated that it is possible to mobilize a high level of resources for housing. Through direct subsidies it has provided over six million housing units. Nigeria is working on the development of a mortgage financing system. In general, private sector involvement in housing finance must be enhanced and encouraged to focus also on slum upgrading.

In a number of our countries, in the context of economic reform and structural adjustment, housing finance institutions have either collapsed or are performing very poorly. It is important to get housing finance institutions properly re-established with a capacity to engage with the poor living in slums. Recently, I signed a Memorandum of Understanding with the Housing Finance Company of Kenya to provide affordable housing within the framework of housing cooperatives in Kenya. Otherwise, the finance company could be doing good business, but mainly with the middle and high income Kenyans. I have also an agreement with Azania Bancorp in Tanzania to provide mortgage finance to low income women households in Dar es salaam whom we have organized into cooperatives. I would urge many other companies to consider the need to increasingly downmarket their financial instruments so as to meet the needs of the urban poor.

Your Excellency Mr. President
Honourable Ministers
Ladies and Gentlemen.

In 2004, UN-HABITAT established the Slum Upgrading Facility to address housing finance. Yes, slums are precarious, unplanned and environmentally degraded. But they are also filled with dynamic people who form a vast low-income labour market that fuels economic growth in the city. Slum dwellers have access to resources, and are resources in themselves. To maximize the value of slums for those who live in them and for a city, slums must be upgraded and improved.  They are an integral part of the city. Let us imagine, Lagos without  Ajegule, Dar es Salaam without Manzese, Nairobi without Kibera, Maputo without Mafalala, Dakar without Piquene,  and Johannesburg without Soweto or Alexandria. Would the city economy really function? I believe say absolutely not. In fact slum dwellers make our cities what they are, and it is regrettable that some high income people exploit the poor by charging them exhorbitant rents for the shacks in which they live. In Kibera for example, 80% of the slum dwellers are renters, and the shacks are owned by rich people who have the connections and hence the impunity to squat on public land. The payback period for slum investors in Kibera is only 9 months!  Another tragedy of our times is that slum dwellers have to pay more for basic services such as water, up to20 times more, because they depend on vendors while the rich have access to subsidized municipal supplies! So, the economics are in favour of empowering the urban poor instead of harassing them with arbitrary unlawful evictions.

 Domestic capital is key to the sustainable development of slum upgrading. Domestic capital takes the form of community savings and resources, commercial capital provided through banks and other formal financial vehicles, and public finance through various forms of government support. In other words, slum upgrading is something that can actually be done in large part from capital mobilised from domestic assets supported by resources generated by local communities, with assistance from the private sector and local government. In this respect, external finance is crucial as a catalyst or  seed capital to kick start the process in motion, build capacity and institutions.

In this regard, UNHABITAT has designed the  Slum Upgrading Facility to test the assumption that lending to community groups of the urban poor is not as risky as many people believe, especially if it is done in the context of a supportive financial framework. Private sector investment capital can be accessed for slum upgrading, but only if repayment generates attractive returns and if projects are “bankable”. Federations of savings and lending groups of the urban poor demonstrate excellent repayment performance and a very low default rate, making them suitable beneficiaries of private investment. When slum dwellers, municipalities and the private sector work together, the slum dwellers  become well placed to structure financing for and implementation of  slum upgrading efforts themselves.  The Slum Upgrading Facility is also testing a mechanism to facilitate the access of cities and other suppliers of infrastructure to domestic finance. It already has operations in the African region, including Ghana, Kenya and Tanzania.

Your Excellency Mr. President
Honourable Ministers
Ladies and Gentlemen.

 As I conclude my statement, let me share with you the latest initiative UN-HABITAT has taken to find ways of reaching the poor with housing finance. Realising that  mobilization of local and domestic capital has been one of the key missing links in the low-income shelter finance equation, the Governing Council of UN-HABITAT at its 21st session in April 2007 adopted a resolution entitled,  Strengthening the Habitat and Human Settlements Foundation: experimental financial mechanisms for pro-poor housing and infrastructure.  We have established the Experimental Reimbursable Seeding Operations initiative, otherwise known by its acronym ERSO, to examine innovative finance mechanisms for financing pro-poor shelter.

 It has recently entered into its implementation phase. An Operations Manual has been produced and currently the ERSO Technical Team in UN-HABITAT is consulting with potential partners to explore opportunities for experimental operations.

 The progress achieved so far has immediate implications for the ongoing work of AMCHUD concerning the efforts to establish an earmarked fund for financing participatory slum prevention and upgrading in Africa. I invite your Excellencies to engage with UN-HABITAT in developing this very critical initiative towards meeting the housing needs of the poor and earnestly addressing the Millennium Development objective of reducing the number of urban slums. 

The UN-HABITAT is prepared to work in active collaboration with your governments to develop and implement programmes to achieve the recommendations of the Enhanced Framework in the areas of re-focusing housing policies and legislations on the poor, women and the vulnerable. UN-HABITAT’s capability in knowledge management can be drawn upon to deepen the understanding of housing and urbanization issues. The UN-HABITAT can contribute significantly to providing technical and operational support for housing delivery in the following areas:

• Slum upgrading through Slum Upgrading Facility
• Innovative housing financing mechanism.
• Urban water supply and sanitation through Water for African Cities (WAC) Programme
• Pro-poor planning and management of urban economy.
• Human settlements planning, development and management totackle the chaotic problem of rapid urbanization through Rapid Urban Profiling for Sustainability (RUSPS).

In this respect, UN-HABITAT is prepared to work with regional and sub-regional institutions such as the African Development Bank as well as the Regional Economic Community and other similar organizations to develop innovative fiancé mechanism for housing.

Word Urban Forum IV, Nanjing, 3-6 November

 And finally, I would like to take this opportunity to extend my personal invitation to your Excellencies to the fourth session of the World Urban to take place from 3 – 6 November 2008.  The last World Urban Forum held in Vancouver, Canada, in June 2006 was attended by 11,000 participants from all sectors of urban life and it provided a great opportunity for exchange and forging of partnerships among stakeholders. This year the Forum will be held in the historic and city of Nanjing, home of the Ming dynasty,  in the People’s Republic of China. The theme of the forthcoming forum resonates strongly with the deliberations of this conference. It will be ‘Harmonious Urbanization: The challenge of balanced territorial development’. I look forward to meeting your Excellencies in Nanjing where you will be able to further share your experience with other stakeholders from within your region and from other parts of the world. 

I thank you for extending me an invitation to speak, for the wonderful hospitality by our host, and for your kind attention.