Subsidies are one of the most versatile, and in some cases, effective tools that governments can use to improve housing affordability. Generally, Sub-Saharan African governments have seen limited success with subsidies, as most governments instead opt to encourage housing production with trunk infrastructure provision and offering hard debt with internal subsidy.
The most common subsidy in the region is the supply-side subsidy, which is usually a loan to developers to build or buy necessary materials or land. In Djibouti, the government is aiming to utilize a subsidy program in order to catalyze foreign investment in housing. To firms that are willing to invest in the country’s housing, they are offering tax and import duty concessions, as well as fast-tracking permit permissions.
Source:
World Bank Group. (2015) Stocktaking of the Housing Sector in Sub-Saharan Africa: Challenges and Opportunities. World Bank, Washington, DC.