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Susu – a culture of saving in Ghana

By Evans Essienyi, AHI West Africa Associate

Susu collector and customer in Ghana (Courtesy Barclay Media Center)

In Ghana, “susu” refers to the process of putting money by. Like many emerging economies, Ghana has a less developed financial market and an exclusive credit industry; “susu” is one of the few processes available to the informal population for insuring themselves in emergencies. The “susu” is done either by an individual who puts money away in a secret place in his/her room, or in a group setting where a trusted group member becomes responsible for keeping the group’s savings, or a susu collector is assigned to do the collection and keeping of the “susu” proceeds.

The “susu” idea is so pervasive that one is unlikely to encounter an informal sector family in Ghana without the habit of putting money by in one form or another. This habit though, is more popular with women – mothers in particular. Parents inculcate the “susu” habit into their children by providing them with “susu boxes” at an early age. Children as young as 7 years old are encouraged to fill their “susu” boxes to cater for their Christmas and birthday supplies. I remember that, as a young boy growing up, I had a “susu” box in which I deposited my change and gifts I received from adults.

The “susu” habit develops other desirable personality traits in children and adults. It entails a lot of self discipline and commitment to set aside, either daily or weekly, portions of one’s meager earnings for the unforeseen. “Susu” also requires one to be prudent with his/her income to be able to sustain a savings habit. For individuals who keep their “susu” proceeds themselves, in their homes, the ability to restrain themselves and delay gratification is also important to main the account for the duration of the determined time or period.

“Susu” does not only provide economic means in emergencies, but also helps socially to develop a very disciplined group of people.

We would be excited to hear about other informal forms of savings from around the world.

Land title and affordable housing development in Africa – Part 2

By Evans Essienyi, AHI West Africa Associate

Last week I asked the question: Is the ‘clean and clear title’ and freehold as understood in the global North truly a prerequisite for a good affordable housing ecosystem? And what are the ways in which more complex forms of tenure can be developed and financed?

NO. Neither a freehold nor a clean and clear title is a necessary requisite for a good affordable housing ecosystem. In my view, the two components of the affordable housing ecosystem – microloan for incremental building and large scale investment by developers in affordable housing is not impeded in any way by the absence of freehold or a clean title.

Microloans for households for incremental building do not require the land as security for the loan. Micro lenders employ strategies such as regular visits, site inspection, and group lending to secure their loans. This means loans can be made to low-income people for home improvements and new constructions in the face of communal land ownership with minimal risk to the lender.

Investments in large scale developments are not subject to increased risks as a result of communal land ownership. In most Sub-saharan countries, long term leases for  large tracts of land for development can be obtained for 99 years; this about twice the life span of most housing projects. The 99-year leases are also renewable.

Also, large scale affordable housing developers can negotiate Joint Venture (JV) partnerships with communal land owners for the land to serve as a contribution from the land owners in return for an equity stake in housing development. This arrangement has the potential of increasing the success and sustainability of the housing project.

It is clear that a clean and clear title is not a necessary requisite for a good affordable housing ecosystem in the global south.

Evans Essienyi is a building technologist and real estate developer experienced in structuring low income housing projects, designing affordable houses, financing options and project development in developing countries, especially Ghana. In the USA, he was elected a Legatum Fellow at MIT, dedicated to creating innovative, sustainable, for-profit enterprises that promote prosperity in low-income countries.

Land title and affordable housing development in Africa – Part 1

By Evans Essienyi, AHI West Africa Associate

- in need of reform, or simply a more nuanced understanding?

Affordable housing is an emerging priority in Africa. In particular, Sub-Saharan Africa is undergoing fundamental and profound changes in demographics as the 21st century moves towards its second decade. In 1983, just 21% of sub-Saharan Africa’s population of 400 million was urban, by 2003, 36% of its 700 million people lived in cities and towns. From 1990-2003 urban growth rates increased by 4.6% per annum, almost twice as much as overall population growth rates, (Stephen Giddings, 2007). At this rate of urbanization, urban managers in Africa have huge problems to grapple with; one of the most pressing being the provision of adequate affordable housing. Most analyses conclude that the development of adequate affordable houses at scale in Sub-Saharan Arica is hindered in three main categories: policy and regulatory, physical and technological and housing finance.

In my experience, the absence of clean and clear title impedes the assembling of large tracks of land at the scale require for massive housing developments. Land Tenure in most sub-Saharan Africa is Customary.  Customary land is land which is owned by Indigenous communities and administered in accordance with their customs and traditions. For example, in Ghana traditional land-owning authorities (stool chiefs, clan heads and skins) hold allodial (absolute ownership) title to land on behalf of their people. Thus outright ownership of land is still a rare form of land tenure in Ghana (Asumadu, Kwame Dr. May 2003).

Land in Kenya is slightly more complex, and is owned by four different kinds of groups: the government, county councils, individuals and groups (Kameri-Mbote, Patricia Dr. 2005).

In Southern Africa, the two principal forms of land tenure systems are customary and statutory tenure (ECA/SA/EGM. Land/2003/2). None of these forms of tenure allows clean and clear title for ownership.

Question for thought: Is the ‘clean and clear title’ and freehold as understood in the global North truly a prerequisite for a good affordable housing ecosystem? And what are the ways in which more complex forms of tenure can be developed and financed?

Continued in Part 2 next week

Evans Essienyi is a building technologist and real estate developer experienced in structuring low income housing projects, designing affordable houses, financing options and project development in developing countries, especially Ghana. In the USA, he was elected a Legatum Fellow at MIT, dedicated to creating innovative, sustainable, for-profit enterprises that promote prosperity in low-income countries.

Gaynor Asquith, 1952 – 2011: AHI MEE report co-author

By Janaki Blum, AHI Staff

Gaynor discussing the report she co-authored at NHC in Washington DC.

We are sad to announce the death on Saturday, November 12th, 2011, of Gaynor Asquith, a close friend of AHI and co-author of the much-requested landmark AHI report, Mission Entrepreneurial Entities: Essential Actors in Affordable Housing Delivery.

Gaynor had over 25 years experience in housing and community regeneration, which included housing investment in the public and social sector in the UK,  especially working at both national and regional levels at the Housing Corporation and Guinness Trust.

She was a founder and well loved director of arc4 a Manchester, UK-based consultancy that specializes in providing creative and workable solutions to complex regeneration issues.

A Fellow of the Royal Geographical Society, Gaynor was a committed conservation activist for Africa, co-founding Project African Wilderness and the PAW Trust, for whom she was a tireless fundraiser and spokesperson.

David Smith, AHI’s Founder and personal friend of Gaynor’s has written an appreciation of her at the AHI USA blog: http://affordablehousinginstitute.org/blogs/us/2011/11/gaynor-asquith-1952-2011.html.

arc4 has a tribute to Gaynor and will carry a memorial book on their website. Please email helen.brzozowski@arc4.co.uk to share your thoughts and memories of Gaynor.

Civil Society and Nongovernment Organization development in Brazil: can a powerful tradition shift to embrace new models of social business and investment?

By Gláucio Gomes, Institutional Development Manager for Atelié de Idéias, Brazil

Friendship Park in Vitoria, Brazil: Volunteers turn garbage into gardens under the program “Good Effort – Valuing the place where we live” conducted by Ateliê de Ideias, Community Forum – Bem Maior, and CISV International, with the support of the City of Victoria and other partners. Photo: Olga Saxén – CISV Finland.

Non-governmental Organizations (NGOs) in Brazil emerged from a distinct period in Brazilian history. Social movements developed as instruments to seek democracy, human and civil rights during the military dictatorship. These NGOs were born when the main focus of Brazilian society was on the big issues: freedom, free elections and free speech.

Most of the social movements came from the rural interior of the country, where land rights and basic social and political reforms were the main issues. Almost all of the local cells of those movements were born inside the Catholic Church, mobilized by community priests. As such, the origin of our non-profit and NGO sector was very politicized and religious. This sector is based on charity, following the principle that the government is a provider from which society must expect the absolute guarantee of all its rights, with no additional fee. The Brazilian constitution of 1988, which was built with the strong participation of social movements, accords with this view.

Organizations slowly formalize and receive funding from international sources.  Most of these social movements started to become formal organizations in the late 1980s and in the 1990s, when they needed to raise funds and hold contracts with foundations and governments.  In the 1990s, all the great militants and left-wing leaders, who were in social movements during the dictatorship period, started to work in NGOs and to help local communities to start their associations, cooperatives, etc. These militants and leaders were great intellectuals, artists, political minds, and community organizers, with the knowledge and skills to mobilize people. However, they were not managers, administrators, or practical leaders with the necessary skills to take care of organizational development and sustainability. Their organizations struggled with the many managerial tasks that international cooperation agencies required of them. In the early 1990s, nearly 95% of funding to non-profit and NGOs in Brazil came from international development aid agencies and foundations such as USAID, GTZ, Oxfam etc.

The public sector becomes a funder. Later in the decade, these international organizations and foundations began to reduce their funding to Brazilian non-profits.  The election of Luis Inácio Lula, our first leftist president (according to the Brazilian political thermometer), took the relationship between civil society organizations and government to another level. Federal and local governments filled the void left by international organizations, building strong partnerships with social movements and beginning to financially support non-profit and nongovernmental organizations. During the 2000s, about 50% of the money to civil society organizations came from governments (federal and local), 40% from international foundations and agencies, and 10% from the private sector.

Government funds enable NGOs to reach an entirely different scale. Now, a small organization from Pernambuco (a state in Northeast Brazil) can become the partner of a ministry or a local government and receive amounts in the order of US$ 250K to develop a social project in its community. That same organization, fundraising with companies and foundations (private sector) could raise, with a lot of difficulty, US$ 50K –but only if the organization had the communication skills to get approval in public selection processes to which more than a thousand other organizations also have applied. In the rural area of Pernambuco it is very hard to find a company willing to fund a local social project.

Independent or merely a conduit? Still, the challenge remains that resources coming through governmental programs have to be implemented using government methods, strategies and approaches. Essentially, those organizations are working as tools or operational means for government policies. We are now debating the main impacts of Lula’s administration. The political and economical relationship model with social movements produced a period of participative public policies, however it has installed some managerial vicious cycles, which threaten the sustainability of these very social organizations. Currently, the problem is that civil society organizations lack the skills in order to develop as sustainable organizations capable of functioning in the “real world”.

The future: moving toward a new model of social business? Prior to the election of Lula, in São Paulo, Brazilian companies had begun to think about social accountability and social investment. However, since Lula’s presidency, no significant private sector participation with social and nongovernmental sector has occurred.

We at Ateliê de Ideias have a different relationship between social organizations and communities/society. Most social organizations are outraged by the idea of building business relationships with communities, embracing self sustaining practices instead of charity, private sector participation in social programs.  Communities are also not prepared to be approached in that way by social organizations, yet. What social investors who want to work in Brazil must know is that there is a previous step – education –   to build the foundations of a new sustainable development model that is in accordance with our political culture and social history. There is place, opportunity and real need for change in this culture.

Gláucio Gomes is a strategic planner for Ateliê de Ideias in Brazil, a social organization producing solutions for urban and local development. Among its many services, Ateliê de Ideias provides access to finance and housing for the citizens of Vitória in Southeastern Brazil. Their flagship program is Bem Morar, an integrated package of services to promote access of low-income families to sustainable and affordable houses.

On MENA affordable housing

By Janaki Blum, AHI Staff

The British Broadcasting Corporation (BBC) asked AHI’s MENA Advisor, Maysa Sabah Shocair, to talk about the lack of affordable housing in the  Middle East and North Africa (MENA) region by for their October 1 news video Shortage of low-cost housing adds to Mid-East unrest.

Maysa explained that the provision of affordable housing is only now appearing on the radar of MENA governments, who for reasons of bureaucracy, lack of resources, political instability or corruption, have had limited, or no, active involvement in this field up to now.  Meanwhile, developers of housing have concentrated exclusively on the upper end of the market. Governments could learn from other regions and introduce incentives for these developers to produce more housing for lower income people. These incentives could be financial and take the form of debt, for instance, or they could be non-financial ones such as access to land, tax breaks, and other supportive measures that could help underwrite the development process.

The interview followed upon her contribution to a special report on affordable housing in the MENA region published by Jones Lang LaSalle, a leading real estate investment and advisory firm. Why Affordable Housing Matters? for MENA shows that demand far outpaces supply of affordable housing across the seven major markets surveyed, causing a shortfall of over 350 million dwellings. It calls for more targeted government involvement, urban planning and community development.

Maysa was filmed during the first Future Cities Conference where she presented a talk on Delivering sustainable affordable housing strategies. This meeting was held alongside Cityscape Global 2011,  on 27 – 29 September, 2011, in Dubai, UAE.