Emmanuel Ade in Abuja
The Federal Government has increased its stake in pan-African housing development finance company Shelter Africa, with an additional capital subscription of approximately $3.003 billion, or $7.15 million.
BisiWeek, a news outlet based in the East African country, reported yesterday that the additional investment at the conservative official dollar/naira = 420 naira to the dollar would put Nigeria just 1 percentage point behind its largest shareholder, Kenya.
Shelter Africa, headquartered in Kenya, says it is the only pan-African financial institution exclusively supporting housing and urban development in Africa.
The organization is a partnership between 44 African governments, the African Development Bank (AfDB), and the African Reinsurance Corporation (Africa-Re).
In addition to the new payment from Nigeria, the company also received further capital subscriptions from Swaziland and Burkina Faso.
Due to the increase in investment ratio, Nigeria’s shareholding rate will be 15.8%, 1 percentage point behind the largest shareholder Kenya (currently 16.85%).
Of Shelter Afrik’s other top three shareholders, AfDB is the one whose shareholding has changed, now decreasing from 12.71% to 12.16%. Mali’s rate was 5.3%, down from 5.54%. Ghana’s rate was 5.05%, down from 5.28%.
The Acting Managing Director and Chief Financial Officer of the organization, Mr. Kingsley Muwolowo, reportedly commended the Nigerian government’s expression of confidence in the organization.
He said the move puts the country in a good position to become Shelter Africa’s largest shareholder once Nigeria fully fulfills its capital commitments.
“We are grateful to the Nigerian government for its continued support and focus on affordable housing.
“We are especially grateful to Minister of Construction and Housing Babatunde Fashola, Minister of State Abubakar Aliyu and Honorable Minister of Finance Zainab Shamsuna Ahmed for their long-term support and honoring this significant payment.
“I would also like to thank Nigeria’s active shareholders and board of directors for their participation,” Muwolowo said.
The relationship between Nigeria and Shelter Africa has grown stronger in recent years. In September 2020, the institution received an additional investment of $9.4 million from Nigeria.
Other countries increasing their stake in Pan-African Housing Development Finance Institutions so far in 2022 are Swaziland and Burkina Faso, which paid an additional $317,854.54 and $34,610.00, respectively.
“So far, we have received $7,504,295.45 in additional capital from member states within the last six months of 2022.
Mr Mułowo thanked shareholders: “This much-needed capital injection will go a long way in strengthening the company’s capital structure in support of our ongoing fundraising activities to raise the additional debt capital required to support our project pipeline, which currently amounts to $1 billion in 44 Member States.”
Shelter Afrik recently completed the issuance of a N46 billion ($110.7 million) series 1 fixed rate senior unsecured bond, its debut in the Nigerian capital market, under the N200 billion ($481.3 million) bond issuance program for housing and urban development in Nigeria.
The company plans similar bond issuances in East African markets, including Kenya, Uganda, Tanzania and Rwanda.
The company announced earlier this year that it was in the midst of a turnaround program aimed at lifting the institution from financial abyss, leading to the sacking of former CEO Andrew Chimunder, a Zimbabwean national whose contract was due to run from September 2018 to 2024.
Chinponda’s exit follows the board’s decision to appoint Mr Mwolowo, the chief financial officer, to fill the role on his behalf pending the recruitment of a substantive managing director.
Shelter Afrik slipped into loss territory in 2015 following allegations of years of mismanagement that led to the sacking of former managing director James Mugerwa over alleged financial irregularities and governance issues.
