Africa’s youthquake: Can housing keep up with the fastest urban growth on Earth?

This 8-part series explores how housing, finance, and innovation can rise to meet the challenge. You’re reading Part 2. Here, you can find Part 1.

A historic transformation is rocking the cities of Africa. The numbers alone are staggering: the continent’s urban population is set to double from 700 million today to 1.4 billion by 2050, with nearly two-thirds of all Africans calling a city home by mid-century. Yet at the heart of this seismic shift lies Africa’s youth. A generation whose dreams, energy, and adversity will shape not only the continent’s future, but also the trajectory of global development.^1,2,3

The demographic surge: Young, urban, and rising

Nowhere on Earth is the march toward urbanisation more urgent or more youthful. Seventy-four percent of Africa’s urban population is under the age of 35, the world’s highest proportion, making African cities the most youthful on the planet. By 2050, over half of the continent’s total population will be under 25, and the largest share of demographic growth will be absorbed by cities. For Nigeria, Ethiopia, DRC, and Egypt alone, this means hundreds of millions of young people seeking opportunity at the urban frontier.^2,4,5

Dreams in the shadow: Youth and the informal city

For much of Africa’s youth, urban life means battling the daily realities of informal settlements. Up to 85% of them live in mortgage-excluded households, in informal jobs, with slums and unplanned settlements forming the de facto cities of their childhood. “We wake up each morning unsure if the roof will leak, whether the landlord will evict us, or if today is the day police tear down our home,” shares a young resident from Kampala, echoing a generation’s sense of precariousness.^6,7,8

Despite their talent and tenacity, these youth face formidable barriers: limited access to affordable and relevant housing finance leaves many vulnerable to the constant threat of forced eviction or displacement. Every informal settlement is a testament to the loss of potential and unfulfilled dreams.^4,8

A system strained: The housing crisis and “massive small”

Can Africa build affordable houses fast enough, affordably enough, and inclusively enough for this rising surge? The current answer, as today’s headlines and statistics show, is an emphatic no. Most countries continue to deliver formal housing at a rate dramatically lower than annual urban population growth, resulting in crippling backlogs and a proliferation of informal housing. Traditional mortgage markets serve a tiny fraction of the African market, locking hundreds of millions out of any hope of owning or even renting a secure, permanent home.^9,6

The prevailing paradigm, led by large, slow-moving developers targeting luxury housing and outdated finance models, is broken. This is not simply a problem of supply, but a structural crisis around who can participate in building and financing homes for the future. As the Centre for Affordable Housing Finance advocates, the solution lies in empowering and scaling the “massive small”, young and growing businesses (YGBs) who know their markets, neighborhoods, and the youth they serve, but who desperately need access to capital, offtake finance, mentorship, and systematic support.

Innovation on the front lines: The Chrysalis project

In the face of these daunting trends, a new wave of innovation is gaining ground. The Affordable Housing Institute’s Chrysalis Housing Impact Accelerator exemplifies this spirit, providing hands-on, cohort-based engagement with emerging housing entrepreneurs and developers to scale up affordable, sustainable solutions in their communities. As the Chrysalis team puts it, “What Silicon Valley has done for tech entrepreneurs, we will do for housing social entrepreneurs...building the capacity of those who can transform housing outcomes on the ground."¹⁰

Commenting on the potential of this initiative, Debra Erb, a global leader in housing finance and consultant to the Chrysalis project, affirms: “There’s deep ingenuity and energy in Africa’s next generation of builders. The right support can unlock a wave of urban transformation -one that isn’t just about buildings, but about dignity, hope, and opportunity for millions of young people.”^11,10

What innovation must do

The message to impact and climate investors is clear: standing still is not an option. To keep pace with Africa’s youthquake, we must unleash new financial models and technologies designed for real conditions:

• Technology must be harnessed to provide new pathways to homeownership, flexible payment models, instalment sales, rent-to-own for blended income sources so that young workers who earn in bits and bursts can still build a path to ownership or secure tenure. To provide solutions to scale with the speed and diversity that Africa’s urban youth demand.^10,6

• Alternative credit scoring systems that use data beyond formal salary slips, mobile money, informal business sales and rental histories, so that people historically excluded can build verified financial identities.

• Green design and climate-resilient materials (cool roofs/walls, shaded outdoor spaces, water capture, airflow ventilation) to reduce heat stress and energy use, especially in informal and semi-formal settlements.

• Impact measurement and investor alignment. Data to show that, like anywhere in the world, housing assets are an investable asset class and how such investment can provide good returns, reduce heat exposure, improve wellbeing, create jobs, and reduce carbon emissions. Because capital can flow only where returns are measured and the metrics are trusted.

African cities are not just growing, they are brimming with promise, resourcefulness, and urgency. In developed economies housing is a significant part of the investment landscape. In Africa, this potential must still be realised.

Call to action for impact & climate investors

The writing is on the wall: the current paradigm is not working and cannot scale to meet this youth league of housing demand. But we have proven innovative models that work. Projects that neither rely on luxury buyers nor on government subsidy, but on the right skills and technology, flexible finance, and climate-resilient design.

Impact investors, climate funders: now is the moment to double down. It is time to invest in supporting the “massive small”. To invest in the YGB developers. Support initiatives like Chrysalis. To invest in alternative finance mechanisms. To invest in the innovative finance tools and technology systems that:

• Align with the lives of those financially excluded, not because of poverty but because of invisibility.

• Reduce risk through credible measurement of return and impact.

• Provide climate resilience as central to the quality of life. 

Because Africa’s youth cannot wait. If housing does not keep up, today's potential could turn into tomorrow's instability. But with the right investment, we can unlock a generational dividend, transforming urgency into hope, resilience, and shared prosperity, one affordable climate-smart home at a time.

illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.

Track the real‑world impact behind the sustainability headlines. illuminem's Data Hub™ offers transparent performance data and climate targets of companies driving the transition.

References:

1. https://www.oecd.org/en/publications/2025/03/africa-s-urbanisation-dynamics-2025_005a8aa0.html 

2. https://www.citiesalliance.org/resources/publications/publications/africas-urbanisation-dynamics-2025-planning-africas-urban  

3. https://africacenter.org/spotlight/africa-urban-growth-security/ 

4. https://www.african-cities.org/wp-content/uploads/2025/03/ACRC_Working-Paper-17_July-2024.pdf  

5. https://mo.ibrahim.foundation/sites/default/files/2021-06/2015-facts-figures_african-urban-dynamics.pdf 

6. https://unhabitat.org/sites/default/files/download-manager-files/Cities of Youth.pdf   

7. https://gga.org/recentre-youths-in-city-planning/ 

8. https://www.african-cities.org/informal-settlements/  

9. https://content.knightfrank.com/research/1741/documents/en/africa-horizons-202526-12118.pdf 

10. https://affordablehousinginstitute.org/chrysalis/   

11. https://affordablehousinginstitute.org/team/debra-erb/ 

12. https://www.oecd.org/content/dam/oecd/en/publications/reports/2025/03/africa-s-urbanisation-dynamics-2025_005a8aa0/2a47845c-en.pdf 

13. https://unhabitat.org/sites/default/files/2024/08/auf2024_background_document.pdf 

14. https://www.auhf.co.za/debra-erb/ 

15. https://amalicities.africa/the-latest-trends-the-urban-governance-implications-of-african-urbanisation/ 

16. https://www.linkedin.com/posts/etta-madete_great-way-to-start-the-week-with-debra-erb-activity-7295480819630919682-DSlm 

17. https://www.africanleadershipmagazine.co.uk/world-habitat-day-2024-african-youths-promoting-urbanisation/?q=african-economic-outlook-2025africas-shortterm-outlook-resilient-despite-global-economic-and-political-headwinds&pr=342696&lang=fr 

18. https://africacenter.org/wp-content/uploads/2025/06/Africas-Unprecedented-Urbanization-Shifting-Security-Landscape.pdf 

19. https://www.linkedin.com/posts/debra-l-erb-947a8b5_clinton-global-initiative-our-pledge-activity-7245184827375689728-pR2O

20. https://www.sciencedirect.com/science/article/pii/S2405844025018274