The Swazi government is entering the low-rental housing market with a financial commitment of a hefty R1 billion.
Government-guaranteed loans of R600 million from the Public Service Pension Fund and R400m from the Swaziland Provident Fund will finance the ambitious project. The Swaziland National Housing Board will construct the units.
“Government recognises shelter as one of the basic needs of people,” said Finance Minister Martin Dlamini, the former Central Bank of Swaziland governor who entered the cabinet this year.
In his first Budget speech in February, Dlamini dropped hints that a massive public housing initiative was under way. “Without good shelter, we can’t have a vibrant and strong society. Swaziland suffers from a housing deficit.”
A legal notice issued this week stated that the project’s loan costs would be charged to the government’s Consolidated Fund and were intended for use to finance the Institutional Housing Project.
The location of the new housing has not been announced, but the units are likely to be scattered among the capital towns of the country’s four regions and Mbabane.
There is an acute shortage of low-income housing at the Matsapha industrial estate west of Manzini. However, uncertainty over Swaziland’s continued participation in the African Growth and Opportunities Act (Agoa), which allows textiles manufactured in Matsapha duty-free access to US markets, has caused a crisis in industrial planning. Some firms have announced that they would close if Swaziland lost its Agoa privileges, putting 17 000 low-income workers, mostly females, and their families at risk of unemployment and homelessness.
“That is the question: who in a declining economy will be renting these new units, even at reduced prices? The loans have to be repaid, and the income will have to come from unit rentals,” Sebastian Thwala, an estate agent in the Manzini area, said.
Dlamini stressed the need for large-scale government projects to boost a sagging Swazi economy with the lowest growth rate in southern Africa.
“This project is planned to kick off in the second half of 2014. It will provide 14 300 jobs. It is expected to serve as a catalyst for significant, sustained growth over the three-year construction period.”
Thwala said: “It is necessary for government to provide low-income housing because the market will not do this. That’s why we have so many people living in informal townships.
“As for employment, these are temporary jobs and paid for by the public sector. It is government concocting a ‘make work’ project to ease unemployment at the Treasury’s expense.”
Swaziland’s urban areas are ringed with burgeoning informal settlements located on communal Swazi Nation land beyond the jurisdiction of municipal authorities.
Some slums, like Moneni in Manzini and Msunduza in Mbabane, are within city limits, and authorities are seeking to give squatters legal ownership to plots in exchange for payment of property rates to finance street paving, lighting and laying sewage pipes.
Earlier this year, the municipal council of Mbabane announced plans to raze 5 000 substandard dwellings in various informal settlements, displacing an estimated 20 000 people. This lent urgency to the low-cost housing initiative.
The provincial capitals of Nhlangano and Siteki report growing informal settlements, with accompanying health and security problems.
The Swaziland National Housing Board was established to provide homes and rental flats to the working class, but has not dealt with indigent housing needs previously.