The Global population growth numbers forecast for the coming years can be extremely daunting, with 2 billion more people on our planet by 2050. When one considers that each of these global citizens will require shelter, health care, education, sanitation, transport, the numbers become even more formidable. Looking at housing needs alone, for the period 2015-2020, global population will grow by 350 million people, amounting to around 70 million new households each requiring a home. Breaking down the numbers annually means 14 million new houses. Based on a conservative estimate of $30k per unit, the total investment needed per annum over coming years is $420 billion. This is a large number but only around 0.6 per cent of global GDP . There are additional costs naturally associated with getting infrastructure and services to new houses, such as roads, water, and sanitation. A recent McKinsey study estimates that in 16 large emerging markets alone there is a $600-700 billion market for affordable housing. Nevertheless, with the right systems in place this level of new investment should be feasible.
So why do we still have market failures in the housing sector which are in plain sight of many emerging market cities in the form of slum housing? Where can the money come from for housing investment? How will it reach the population which is going to need it the most in sub-Saharan Africa and parts of Asia, which will see the most rapid population growth and urbanization?
Business reforms can spur economic dynamism in the East African Community
East Africa is famous for its breathtaking landscapes and its unique concentration of wild animals. Could it also become as famous for its dynamic economic development?
In 2009 I came to Tanzania to work on tax harmonization in the East African Community (EAC). The Common Market Protocol was about to be signed and one of the biggest goals was to tap into the economic potential of the region by facilitating (cross-border) trade and improving the business climate. A year later, the five Partner States of the East African Community ratified the Common Market Protocol in order to realize “accelerated economic growth and development through the attainment of the free movement of goods, persons, labor, the rights of establishment and residence and the free movement of services and capital”. The overarching goal of the East African Community is to achieve sustainable economic growth in order to increase employment and reduce poverty.