Ethiopia plans to construct at least 1.5 million new homes over the next five years as the government seeks to address the country's growing housing shortage.
Prime Minister Abiy Ahmed announced the target while responding to questions from members of the House of Peoples' Representatives on the country's housing challenges. The plan is part of a new national housing development strategy intended to expand homeownership and increase housing supply across the country.
The announcement follows the construction of approximately 1.2 million homes nationwide over the previous five to seven years, according to statements attributed to the Prime Minister in recent reports.
Government looks beyond public financing
The government says the new housing program will not depend solely on state funding.
Private developers, public-private partnerships and other strategic partnerships are expected to play a significant role in delivering the 1.5 million homes. The government has also said work is underway to improve access to land, bank financing, architectural services and other inputs needed to accelerate housing construction.
The approach reflects a broader effort to increase private-sector participation in housing development while reducing the financing burden on the government.
New housing policy approved
A new national housing development policy has reportedly been formulated and approved by the Council of Ministers, with implementation already beginning in cities and regions across the country.
The government says the policy is intended to provide a more coordinated framework for housing development and address some of the structural challenges that have slowed construction in the past.
Preparatory work is also being carried out within the construction sector. The Prime Minister said factories producing construction materials have begun operations, while training programs are being expanded for construction professionals.
The government is also seeking to increase domestic production of materials such as steel and cement in order to reduce supply constraints as construction activity expands.
Long-term mortgages planned
Housing finance is another central component of the new program.
The government says it is strengthening the mortgage system to allow people who cannot afford to purchase homes outright to acquire properties through longer-term payment arrangements based on their income and financial capacity.
Under the proposed framework, homeowners would make regular payments over an extended period rather than having to finance the entire purchase price upfront.
The government sees expanded mortgage financing as an important mechanism for increasing access to homeownership while creating a more sustainable housing-finance system.
Construction already underway
According to the Prime Minister, implementation of the new housing program has already begun in urban and rural areas.
The government says the program is being supported by preparations involving land, financing, construction materials, skilled labour and policy reforms, with the objective of creating the capacity required to significantly increase housing production.
Housing demand remains substantial
The 1.5 million-unit target comes as Ethiopia continues to face a significant gap between housing demand and supply.
The Prime Minister described the target as substantial but said it remains modest compared with the country's overall housing needs. The government expects the combination of increased construction, private-sector participation and improved housing finance to help address both the shortage of homes and pressure in the rental market.
The program is also expected to generate economic activity and employment through increased demand for construction workers, building materials, professional services and related industries.
A major expansion of Ethiopia's housing sector
The five-year target represents a significant planned expansion of housing construction and places greater emphasis on collaboration between government and private developers.
Its implementation will depend on the availability of serviced land, construction materials, skilled labour, financing and effective project delivery. The development of long-term mortgage finance and greater private-sector participation are expected to be key elements in determining how quickly the planned homes can be delivered.
If implemented as outlined, the program would substantially expand Ethiopia's housing stock while creating a larger role for private developers, financial institutions and other participants across the property and construction sectors.