Tanzania Daily News (Dar es Salaam)

26 June 2014

Tanzania: Firm Set to Build 50,000 Houses for Servants

PUBLIC servants have a reason to smile as they are set to benefit from more than 50,000 housing units to be built by Watumishi Housing Company (WHC).

Speaking to the 'Daily News', WHC Chief Executive Officer (CEO), Dr Fred Msemwa, said the company, which was established last year, was the main implementer of the Tanzania Public Servants Housing Scheme tasked with building 50,000 housing units in phases.

Dr Msemwa said the housing units would be sold to public servants across the country under the mortgage arrangement. "WHC will link up public servants interested in buying the housing units with appropriate banks...the banks will pay for the housing units for the prospective buyer and make monthly deductions from the buyer's salaries," he explained.

The CEO revealed that prospective buyers would not be required to make a down payment before the houses were constructed as was being done by other institutions building and selling low-cost houses in the country.

He said special features that would make the houses more affordable to public servants include affordable interest rates of between 11 and 13 per cent from the banks; the ability to defer payments and pay some amount at the end using pension fund, and a longer repayment period of up to 25 years.

"There will be no requirement for deposits from the house buyer and there will be an option for those who want to pay earlier than the agreed repayment period," he explained.

Dr Msemwa noted that estimates showed that about 650,000 servants working in the public sector in the country, out of whom only 10,000, or less than 2 per cent, had been provided with residential accommodation through the leasing or house purchase scheme.

"The existing housing backlog which is now estimated at 3 million housing units and is growing at 200,000 units yearly means that new delivery methods are needed to bridge the gap," he stressed.

He added that this prompted seven public institutions to join hands to speed up the provision of massive quality homes to public servants in the country.

These institutions include PPF Pensions Fund, National Social Security Fund (NSSF), Public Service Pension Fund (PSPF), Local Authority Pension Fund (LAPF), Government Employees Provident Fund (GEPF), National Health Insurance Fund (NHIF) and National Housing Corporation (NHC).

"Shortage of housing units in the market has pushed both residential as well as commercial property on the higher side. But this trend is likely to be reversed in the near future as Watumishi Housing Company enters the real estate market to increase the supply," he explained.

Dr Msemwa said construction of the 50,000 housing units was set to begin from September, this year, and would be implemented under five phases countrywide.

Phase one, which will range from 8 months to 18 months, would entail construction of 1,500 housing units in Dar es Salaam, Coast, Tanga, Arusha, Mwanza, Shinyanga, Mtwara, Lindi, Tabora, Dodoma, Morogoro, Ruvuma and Mbeya regions.

"The housing units will come in a variety of designs and sizes which are in accordance with Tanzanian culture and lifestyle.

Public servants should start preparing to grab this opportunity by ensuring that they do not take unnecessary loans to ensure their salaries qualify for mortgage deductions when they apply for housing loans," Dr Msemwa explained.

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