IMPACT OF HOUSING FINANCE MARKET ON GROWTH OF SELECTED AFRICAN ECONOMIES

IMPACT OF HOUSING FINANCE MARKET ON GROWTH OF SELECTED AFRICAN ECONOMIES

ABSTRACT

The motivation for this study arose from the need to place the African Continent on the part of sustainable economic development. Most Countries in Africa have been adjudged to be among the poorest nations, in sharp contrast with the abundant resources in the housing sector. The study adopted the ex-post facto research design. Annual longitudinal data from 1997 to 2014, a period of 18 years were collected from various data banks. The classical linear regression model was used in testing the seven hypotheses formulated from the sampled economies of Kenya, Nigeria, Burundi, Morocco and Namibia. Real Gross Domestic Product (RGDP) constituted the dependent variable, which is proxy for economic growth while outstanding mortgage loans by mortgage banks (MBOHL) and Commercial banks (CBOHL) constituted the independent variable. While interest lending rate (LINT), Total housing loan as a percentage of total loans (THLPTL) and total housing loans as a percentage of GDP (THLPGDP) were proxied for control variables. The findings revealed that housing finance is positive and statistically significant for some African nations, it is positive and none statistically significant for some other African nations. The study recommends a holistic approach to housing finance through Government policy direction, market based economy and introduction of Mortgage Backed Securities (MBS) in the capital markets across the African continent.