Kenya’s World Bank financing conditions a warning shot for Africa

MIKE ERIC JURU

Kenya recently secured a US$750 million Second Kenya Fiscal Sustainability and Resilient Growth Development Policy Operation from the World Bank after implementing a raft of governance, public financial management and social protection reforms.

This latest financing arrangements signal more than a routine lending programme.

It offers a glimpse into the emerging rulebook that international lenders, investors and development partners are increasingly applying across Africa.

The message is clear, future financing will depend less on promises and more on measurable reforms, governance standards and institutional credibility.

For Zimbabwe, the implications extend beyond sovereign borrowing.

The country’s ambition to attract large-scale investment into housing, commercial real estate, industrial parks, logistics centres and mixed-use developments will increasingly depend on its ability to meet the same standards demanded by international lenders and institutional investors.

The future of African real estate finance will be determined as much by governance quality as by land availability or construction demand.

The question is no longer whether Zimbabwe needs reform. The question is which reforms will unlock the billions required to transform the built environment.

Create bankable land and property rights

The single most important reform is certainty of ownership. Global pension funds, private equity firms, insurers and sovereign wealth funds invest in jurisdictions where ownership rights are legally enforceable and transferable. Investors funding a housing development or logistics park need confidence that they can register, transfer, mortgage and enforce property rights through the courts.

Zimbabwe should therefore accelerate modernization of its digital land registries, fasten title deed issuance, transparent valuation systems, streamlined land transfer procedures and specialised property courts for dispute resolution. Without secure title, land cannot become collateral.

Without collateral, long-term development finance remains constrained.

Countries that have successfully attracted major property investment have typically focused first on legal certainty before physical construction.

Reform municipal governance

Many international property investors are wary of African cities not because of market demand but because of municipal risks.

Investors seek answers to simple questions; Will water be available? Will roads be maintained?

Will zoning approvals be honoured? Will service charges be predictable? Can permits be obtained efficiently?

A housing estate is only as valuable as the infrastructure surrounding it. Zimbabwe’s urban authorities should establish; digitised planning approval systems, online building permit processes, fixed timelines for development applications, transparent zoning frameworks and independent appeals processes.

Delays in approvals often add more cost to a project than construction inflation itself.

Establish Real Estate Investment Trust (REIT) Reforms

A major obstacle to property development is the shortage of long-term domestic capital. Zimbabwe’s pension funds, insurance companies and asset managers hold significant pools of capital.

However, much of this money struggles to find scalable investment vehicles.

Government should strengthen the REIT ecosystem by providing tax certainty, expanding listing incentives, improving disclosure standards, protecting minority investors and encouraging institutional participation.

REITs convert property into investable securities, allowing pension savings to fund housing, offices, hotels and warehouses.

South Africa’s REIT market illustrates how domestic savings can become a powerful engine of property development.

Introduce Infrastructure-Linked Development Financing

One reason many African real estate projects fail is that developers are expected to build everything simultaneously housing, roads, water systems, sewer networks and power infrastructure.

This dramatically increases costs. Zimbabwe should secure or establish infrastructure development funds that finance bulk services separately from property construction. International investors are increasingly willing to fund infrastructure assets that generate predictable returns. Separating infrastructure financing from development financing would immediately improve project viability.

Strengthen public procurement and PPP rules

Kenya’s recent World Bank-supported reforms focused heavily on procurement transparency and conflict-of-interest controls.

These reforms were viewed as essential to unlocking financing.

Zimbabwe can achieve similar outcomes by creating competitive tender systems, public disclosure of contracts, beneficial ownership registers, independent procurement oversight and modern PPP regulations.

Large urban developments increasingly rely on public-private partnerships. If investors believe procurement is opaque, they simply take their capital elsewhere.

Develop a Mortgage Finance Industry

Zimbabwe cannot solve its housing deficit without long-term mortgage markets. Most successful housing booms worldwide have been supported by affordable mortgage products, secondary mortgage markets, mortgage-backed securities and housing finance institutions. Investors are more willing to finance residential projects when predictable end-user financing exists. Developers build faster when they know qualified buyers can obtain credit. Mortgage reform may therefore be one of the most important housing reforms available.

Adopt international transparency standards

Global investors now conduct extensive environmental, social and governance (ESG) reviews before funding projects. The World Bank’s Kenya programme demonstrates growing emphasis on transparency, accountability and measurable governance outcomes. Zimbabwe should require ESG reporting standards, environmental compliance frameworks, beneficial ownership disclosure, anti-corruption certification and independent project audits.

This is particularly important for attracting development finance institutions such as IFC, AfDB and regional infrastructure funds.

Create a green construction framework

A major source of future funding will come from climate-linked finance. Institutional investors increasingly allocate funds to Energy-efficient buildings, solar-powered developments, water-efficient housing, green industrial parks and climate-resilient infrastructure.

Kenya has already faced World Bank requirements linked to sustainability frameworks and environmental commitments.

Zimbabwe should position itself ahead of the curve by introducing Green Building standards, Energy-performance certification, Carbon-efficient construction incentives and Green bond frameworks. This would unlock entirely new pools of international capital.

Establish urban development zones

Investors prefer certainty. Government could designate special urban development zones in Harare, Bulawayo, Victoria Falls and selected growth corridors and within these zones the approvals could be fast-tracked with infrastructure guaranteed, tax incentives clarified and regulation simplified. Investors are often willing to commit significant capital when administrative risks are reduced.

The bottom line

Zimbabwe’s real estate challenge is frequently described as a financing problem.

In reality, it is largely an institutional problem. Capital is not scarce globally. Trillions of dollars are seeking long-term assets that generate stable returns.

What investors increasingly demand is confidence: confidence in titles, contracts, regulations, courts, municipalities and governance.

The lesson emerging from Kenya’s engagement with the World Bank is that access to capital is becoming conditional on reform.

Governance quality is becoming an asset class in its own right.

If Zimbabwe implements reforms in land administration, municipal governance, mortgage finance, procurement transparency, REIT regulation and green finance, it could attract substantial investment into housing and commercial property over the next decade.

The country does not need to convince investors that opportunities exist.

It needs to convince them that those opportunities are bankable.

Juru is a recognised and accomplished business leader who is the current Chairman of the Green Building Council Zimbabwe, Valuers Council of Zimbabwe and CEO of Integrated Properties. His previous National leadership roles include Chairman of Institute of Directors Zimbabwe, President of Real Estate Institute of Zimbabwe, inaugural Chairman of REITs Association, Vice President ZNCC. He has sat on several Boards in private and public sector. He leads passionately the transformation of Zimbabwe’s built environment to sustainability.