Presentation on theme: "Nehemiah Kyando Mchechu"— Presentation transcript:
1REACHING THE NEW HEIGHTS THROUGH A NEW PARTINERSHIP between TANZANIA AND TURKEY! Nehemiah Kyando Mchechu. Director General – National Housing Corporation
2AFRICA THE FINAL FRONTIER The Investments risk paradigm has shifted. Today the risk is not to invest in Africa, but rather not investing in Africa!Tanzania
3And this could be Africa’s Century! The world’s leading investment analysts have identified Africa as the NEW FRONTIER of unprecedented economic growth driven by*Commodities (minerals)Oil and Gas (Hydro and Bio-Fuels too)Agriculture (Land and Water)HealthcareInfrastructureTelecommunicationsInformation TechnologyDefenceFinancial ServicesRetail*Merrill Lynch Thematic Investing Report July 23, 2007.Africa: The final frontier.
4Uplifting the face of Tanzania & Improving it's Citizens Life Africa has the youngest population in the world, a potential opportunity…Africa Youth Bulge MapAfrica is the youngest continent with the Median age<25yrsUplifting the face of Tanzania & Improving it's Citizens Life
5The opportunity is even growing… Reaching the New Heights, with Fresh Thinking!
6Welcome to Tanzania; the land of Kilimanjaro, Serengeti and “Zanzibar, the spice islands”TanzaniaFinancing Affordable Housing For Low Income Groups: Tanzania Case
7Tanzania Overview Stable Government, Multiparty Democracy, Dar es SalaamMwanzaKilimanjaroArushaStable Government, Multiparty Democracy,Historically Peaceful Power Transition from one regime to anotherFourth Government Regime under President J.M. KikweteGold mining output 3rd largest in Africa (~38.8m ounces)
9Tanzania has unique (hyper) growth opportunities in 8 out of 10 sectors CommoditiesOil and Gas (Hydro and Bio-Fuels too)Agriculture (Land and water)Infrastructure for Tanzania and the regionRetail (specifically Tourism)TelecommunicationInformation TechnologyFinancial services (Housing Finance)
10Tanzania’s Trillion Dollar Mining Industry! Resource NameConfirmed Resource Volume**Resource 2007 PricesIron Ore (tons)1,500 million$168BnTin (tons)250,000$3.5 BnNickel (tons of 2.8% Ni)144 million$107 BnDiamonds (crts)51 million$244 BnCoal (tons)$30 BnGold (ozs)1,000 million$650 BnTanzanite (crts)50 million$75 Bn TOTAL$1,279Bn*Excludes hydrocarbons, copper, gemstones and uranium**Source : Opportunities for Mineral Resource DevelopmentMinistry of Energy and Minerals10
11WE WANT TO BRING A HOPE AND SMILE TO EACH HOUSEHOLD IN TANZANIA BY PROMOTING HOME OWNERSHIP . A JOURNEY WE MUST TAKE…
12TURNING A HOUSING PROBLEM INTO A GROWTH OPPORTUNITY Facts about the housing industry in TanzaniaMore than 99% of Tanzanian homes built out of pocketIt takes 5-10 years to complete a house under the current system instead of 9-12 monthsthe dead capital on stock of houses > total bank depositsReaching the New Heights, with Fresh Thinking!
13TURNING A HOUSING PROBLEM INTO A GROWTH OPPORTUNITY More facts about the housing industry in TanzaniaTotal housing deficit = 3m units or $ 180bn, Demand = 200,000 p.a. Or $ 12bn! Only second to GoldIndustrialization and standardization in the construction sector held backUrban population is approx. 37.5% and growingCurrent Housing deficit + annual demand + the population growth + urban migration = Big Hyper-Growth Opportunity That Tanzania can leap on itUplifting the face of Tanzania & Improving it's Citizens Life
14Recent Developments Reforms in Tanzania Liberalization of the Banking Sector in 1993.Today, 42 banks operate in Tanzania from only 4 banks in 1993, and the credit expansion to private sector has been growing at an average rate of 35% in the last 5 years.Review of the 2004 Land Act to cover for the Mortgage finance.There was no participation from Commercial banks in Mortgage Financing because of the existing land actCommercial Banks concern have now been addressed and the new mortgage finance law has been put in place, this has encourage more banks to start offering mortgage finance which is likely to address the Mortgage finance affordability as we see more playersUnit titles law (Condominium Law) has been put in place.This will allow for Developers to undertake big projects and sale the apartment units.In turn, this will increase the affordability by reducing the inbuilt cost of infrastructure.
15Recent Developments Reforms in Tanzania Re-structuring of the Ministry of land especially on the title registry section and decentralization of the power for commissioner for land.This ought to increased the speed and efficient of issuing and registering titlesIntroduction of the full fledged Housing directorate in the MoLHHDOur Government is very focused on the housing sector, the new directorate will play a key role on coordinating the strategies and the plans execution.
16Recent Developments Reforms in Tanzania A reform on Social Security funds and insurance regulatory frame work that will allow for long-term financing to be strategically channeled on respective long-term financing like Housing Financing is underwayThe Government in partnership with World Bank has set the liquidity facility to support the Housing Financing Lending Institutions.Macro-Economic stability remains to be on focusExchange rates: Tanzania has a reasonable FX reserves with the 4 months import cover.Interest rates: Good efforts in Lowering of Treasury Bills Interest rates , currently at around 7%.Fiscal policy: There has been some good measures on increasing the tax collection.
17Affordable Housing - Key Challenges Housing FinancingThere’s still lack of depth of housing financing, where the maximum tenor offered is 20 years and inactive capital market.House Supply improvementWith the previous lack of Mortgage Financing, there was also lack of Finance to Developers.Appropriate TechnologyGovernment support and other stake holders inputs is still needed in most emerging economies to support the research and development in the sectorPublic Awareness on the new lawsThere’s a public awareness campaign to educate the public on the current key opportunities coming out of the new laws. The Government through the MoLHHD is working on this matter.The Regulatory framework for Valuer’s, Developers and property agency is under development
18Other Regulatory Key issues Pubic Procurement Act, 2004Public Private Partnership Act, 2010Labour LawsTaxes and tax incentivesContractors and professionals registration boardsInternational Contractors and consultants can be temporarily registered on winning a contractUplifting the face of Tanzania & Improving it's Citizens Life
19Uplifting the face of Tanzania & Improving it's Citizens Life Building MaterialsCement, paints, iron sheets, steel – opportunity for expansion and investmentTiles, electrical, sanitary appliances, data/electronics – importedUplifting the face of Tanzania & Improving it's Citizens Life
20Uplifting the face of Tanzania & Improving it's Citizens Life Equipments & toolsEarth moving – bulldozers, scrapers, loaders, rollersTransportation – dump trucks, crane trucksHoisting – cranes, construction lifts, construction hoistsConcreting – mixers, pumps, concrete trucksTools – vibrators, compactors, power float, breakersFalse work – scaffolds, formworkUplifting the face of Tanzania & Improving it's Citizens Life
21General market conditions Local skills availableEngineers, architectsTechniciansCompetitive marketConstruction – companies from China, RSA, ItalyConsultants - from Europe, Asia and AfricaFund repatriationUplifting the face of Tanzania & Improving it's Citizens Life
22REACHING THE NEW HEIGHTS WITH FRESH THINKING. - “NHC is The Hidden Gem”
23WE WANT TO TRANSFORM “nhc” TO BECOME THE ENGINE OF OUR ECONOMY. All Rich people have either made their wealth from Real Estate or Kept it in Real Estate, No one should be left outReaching the New Heights, with Fresh Thinking!
24Nhc overview & Situational Analysis The current property stands at 2,389 buildings with 17,111 unitsOur Capital Base stands at about USD 1 billionWe’re the largest Company in Tanzania and in East Africa by Capital Base (Private Companies, PLC, & State Owned Companies)East Africa Market comprise of 5 Countries with the Population >100mNHC is one of the top 3 Real Estate Companies in SSA by Capital BaseWe have an independent Professional Board and Management TeamThere is a very strong Political will to support NHC and the Real Estate Sector in order to promote Home OwnershipThe operating Legal environment for NHC and other players is very conducive.Uplifting the face of Tanzania & Improving it's Citizens Life
25NHC must play A KEY leading ROLE ON AN INTERIM PERIOD. NHC has been in the market for more than 48 years.NHC has a strong capital base from its stock of houses that is estimated to be in excess of USD 1 billion.NHC can upgrade some of the existing houses and sell them at the real market price and therefore make more money that can be ploughed back and be used for the constructions of new houses for sale and therefore enabling more Tanzanians to own Houses.NHC has the ability to raise the medium & long-term liabilities from the Capital market due to its credibility;NHC has a good distribution across the country, of which if properly exploited, it could easily help to drive the development of the housing industry across the country.The goodwill of NHC is such a special assets which has not been tapped at all; both borrowers and lenders are more comfortable to deal with this name due its historical nature, balance sheet size and its shareholding structure.Uplifting the face of Tanzania & Improving it's Citizens Life
26WHAT are the key BENEFIT to NHC for taking the key leading role? Efficient utilization of NHC resources to ensure that, the organization raises the capital from within and operates profitably.Country Economic benefits ranging from job creation, citizens life improvement, a stable/peaceful and harmony society, increased tax collections, an opportunity for consumption market of utilities and households etc.Housing for all; NHC can help a great deal on supporting the housing for all agendaFormalization of the Economy:- The mortgage lending and hence home ownership will foster the credit accesses to Tanzanians, and hence help on widening the Tax base.Reaching the New Heights, with Fresh Thinking!
27WHAT are the key BENEFIT to NHC for taking the key leading role? 5. Broadening the focus of NHC beyond their seemingly current main business of house rental to massive house development for sale as per the new Act!Allow NHC to play a key role in establishment of the secondary market for houses to carter for the transitional period.Give NHC a Pro-actively key role of coordinating the efforts of different stakeholders within the sector i.e. Financial Institutions, Various professional boards, and research and development firms/companies dealing in housing industry.Uplifting the face of Tanzania & Improving it's Citizens Life
28To be a leading Real Estate Development and Management firm Vision StatementCore ValuesTo be a leading Real Estate Development and Management firmMission StatementTo provide and facilitate the provision of quality housing and other buildings for use by the general public while operating on sound commercial principlesOur Core Values evolves around Integrity, Transparency, Efficiency, Team Work, Professionalism and Innovativeness
29Statements of Core Values Professionalism: We will always perform commercially while adhering to ethics and upholding quality and standards.Efficiency: We will always satisfy our customers by delivering services skilfully and timely.Team work: We will always work together to achieve our corporate goals.Innovativeness: We will always develop new methods and ideas that will bring positive changes in the organisation.Transparency: We endeavour to convey correct, timely and complete information about our services and products.Integrity: We will always be credible and consistent in our actions.“P E T I T I”Uplifting the face of Tanzania & Improving it's Citizens Life
30The Strategic Plan – key goals Goal - This plan has six major GoalsTo become a leading real estate developer.To become an efficient real estate manager.To strengthen operational capacity and control mechanism.To optimally deploy human resources base.To review and improve the all contracts and legalTo boost the corporate imageUplifting the face of Tanzania & Improving it's Citizens Life
31GOAL ONE: To become a leading real estate developer : 1) To construct a minimum of 10,000 medium and high class houses for sale and lease by June 2015. Rationale:Despite the enormous demand for houses in Tanzania, which is in a tune of three million and growing at a rate of 200,000 units per annum, NHC has not been able to undertake mass housing schemes due to lack of conducive funding environment. The changing funding environment coupled with housing shortage will now enable NHC to undertake massive construction of houses.2) To construct a minimum of 5,000 units of social housing by June Rationale:Provision of social housing is necessary in order to uplift the living conditions of the low income group. However, NHC will only participate in provision of social housing if it is assured of at least to break even. Otherwise, the government is also expected to participate by granting subsidies or setting up a special programme.Uplifting the face of Tanzania & Improving it's Citizens Life
32GOAL ONE: To become a leading real estate developer: 3) To play a role of a master developer by June 2013. Rationale:In its other role of facilitating the provision of housing and other buildings, the NHC endeavors to become a “master developer”. It will acquire parcels of land, plan and service them. Furthermore, it will sell some of the projects to other developers and retain some for its own development. It will also ensure that other developers comply with development regulations and standards. 4) To mobilize investment funds to the tune of TAS 1.5 trillion by June 2015.In order to achieve the target of constructing a minimum of 15,000 units, mobilization of funds is necessary. Funds will be mobilized from different local and foreign sources. NHC will use its property wealth to leverage these funds and service the costs of loans.5) To embark on intensive marketing of houses constructed for sale by DecAggressive marketing is necessary in order to appreciate the market needs, tastes, life style, spending patterns, fashions as well as creating interface between buyers and banks so as to stimulate demand. NHC shall commence serious marketing strategies to ensure business continuity.Uplifting the face of Tanzania & Improving it's Citizens Life
33What do we want to achieve We are looking for interested partners who are willing to partner with NHC in Tanzania to develop the Housing sector either as Contractors or Investors.We are looking for the right partners to support Capacity Building and where possible support other key stake holders on the Housing Sector in TZWe want to learn on how the Turkish People have been able to achieve the efficient and effectiveness in the construction Industry on three key pillars i.e. Time, Quality & Cost while executing their projects.Get a good understanding of appropriate technology and where possible look for technological partner.Uplifting the face of Tanzania & Improving it's Citizens Life
34Business opportunities JV/PPP with NHC – residential housing, retail & office spaceContracting and consultancy opportunitiesBuilding materials, equipments and toolsInfrastructureUplifting the face of Tanzania & Improving it's Citizens Life
35Welcome to Tanzania; the land of Kilimanjaro, We encourage all interested partners from Turkey to come toTanzania and benefit from key Reforms that the Country hasUndertaken. Join and Support our efforts of creating moreAffordable houses while also creating your good returns.Welcome to Tanzania; the land of Kilimanjaro,Serengeti and “Zanzibar, the spice islands”Tanzania