The federal government has increased its stake in pan-African housing development finance company Shelter Africa, with an additional capital subscription of approximately N3.03 billion, or $7.15 million.
VisiWeek, a news outlet based in the East African country, reported yesterday that the additional capital contribution at the conservative official dollar/naira rate of 420 naira 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 payments from Nigeria, the company also received further capital commitments from Eswatini (formerly Swaziland) and Burkina Faso.
As a result of the increase in stake, Nigeria’s shareholding rate now stands at 15.8%, one point behind Kenya’s largest shareholder (currently at 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 especially thank the Minister of Labor and Housing, Babatunde Fashola, the Minister of State, Abubakar Aliyu, and the Minister of Finance, Zainab Ahmed, for their long-term support and respect for this significant payment. “Furthermore, we thank the active Nigerian shareholders and board of directors for their participation,” Muwolowo was quoted as saying.
The relationship between Nigeria and Shelter Africa has grown 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 in 2022 so far are Eswatini and Burkina Faso, which paid an additional $317,854.54 and $34,610.00 respectively. “So far, we have received additional capital of $7,504,295.45 from member states within the last six months of 2022.
He thanked shareholders, saying, “This much-needed capital injection will go a long way in strengthening the company’s capital structure to support our continued fundraising efforts to raise the additional debt capital needed to support our current $1 billion project pipeline in 44 member countries.”
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.
Mr. Młowo thanked shareholders, saying, “This much-needed capital injection will go a long way in strengthening the company’s capital structure to support our continued fundraising activities to raise the additional debt capital required to support our project pipeline, which currently amounts to $1 billion in 44 member countries.”
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 years of allegations of mismanagement that led to the sacking of former managing director James Mugerwa over alleged financial irregularities and governance issues.
