Majority of Shelter Afrique shareholders have defaulted on their capital contributions, sending cumulative arrears on capital subscriptions to $114.3 million to the detriment of the pan-African mortgage financier. The 44-member company says in its latest annual report that this is slowing down its ability to deliver on the mandate of supporting development of the housing and real estate sector in Africa. “Among the immediate critical challenges facing the company is the very low fulfilment of shareholders’ capital contributions by some member states,” notes Chairman Nghidinua Daniel. “This fact continues to undermine and negatively impact the capacity of the company to perform its mandate.” He said that last year, only 11 members made new capital contributions amounting to $48 million giving the company a lifeline at a time when it was facing a liquidity crunch. The funds were from Kenya, Cameroon, Ivory Coast, Mali, Morocco, Namibia, Nigeria, Rwanda and Zimbabwe as well as Africa Re-Insurance and African Development Bank. Kenya was the highest contributor with $9.54 million followed by the African Development Bank with $8.2 million and Nigeria with $5.96 million. The company says that this is “a long way” from the capital injection expected from shareholders if the company is to implement the 2018-2022 strategy. During last year’s symposium at Victoria Falls in Zimbabwe, it was recommended that the institution introduces steep penalties for delayed payments including auctioning shares of countries in arrears. However, in a phone interview, Shelter Afrique chief finance officer Kingsley Muwowo said that this was softened during last week’s annual general meeting in Nairobi as members pledged to honour their pending contributions. He explained that most of the members whose capital contributions are in arrears said the delays were due to fiscal challenges in their countries. “The strategy is to ensure that the company continues to be recapitalised every year over the next five years. We have not reached that stage (of auctioning out members) yet. The delays are due to fiscal challenges in the respective countries,” he said. The firm last made a profit in 2014 and is counting on the changes in management and strict credit control mechanisms as well as debt restructuring to turn around its fortunes. Business Daily
