# **2 Housing Expenditures in SSA:  Households still grappling with subsistence**

This section investigates households’ expenditure patterns with the aim of understanding how households make tradeoffs in allocating their budgets over time to housing and other amenities. Specifically, this section examines households’ housing expenditures by income quintile, types of urban area, and explores the tradeoffs that households make between housing consumption and other types of expenditures.

## **Box 2. Measuring Household Expenditures**

Housing expenditures are captured in the SHIP data as total expenditures on housing. Total housing expenditures include maintenance and repairs of the dwelling, utilities (electricity and gas), water, and fuel used in the home. However, rent (neither actual nor imputed) is not included in total housing expenditures because of the high percentage of households who own their homes as well as the lack of renters in rural areas, which account for the majority of the Sub-Saharan African population. For purposes of analyzing all household expenditures, rent, when paid, is added to the total housing expenditures as well as to the overall total household expenditures. (For an analysis that also includes imputed rent, and an explanation of why imputed rent it is not used in the main analysis, see Annex 2). The household expenditure types reviewed include housing, food, and transportation in order to understand how households trade off housing expenditures with other critical expenditures. All expenditure data used in this analysis are calculations of expenditure type (housing, food, and transportation) as a percent of total expenditures.

# **2.1 Today, household expenditures on housing remain low throughout SSA and across rural and urban areas**

Across Sub-Saharan Africa, household expenditures on housing and transportation vary across rural and urban areas. The radar charts in Figures 1 a) and b) show the country-level housing and transportation expenditure percentages for each of three different types of areas defined: rural, largest city, and other urban areas. As expected, urban households appear to allocate a higher percentage of their expenditures to housing than rural households, except in Ethiopia, Malawi, and Uganda. In general, households residing in a nation’s largest city allocate more to housing than those residing in rural or other urban areas. Aside from countries with higher percentages of housing expenditures in rural areas, Cameroon, Kenya, Liberia, Tanzania, and Zambia have households residing in other urban areas spending more on housing than their counterparts living in the largest city. Transportation expenditures are more consistent across countries and urban areas. Figure 1 b) shows the relative magnitude of transportation expenditures in the largest city compared to other urban and rural areas. In all but the island nations of Comoros and São Tomé and Principe, those households living in larger cities spend, on average, a greater percentage of expenditures on transportation than rural households. Likewise, households in other urban areas tend to allocate more of their household expenditures to transportation with Comoros, Angola, and São Tomé and Principe being the exceptions.

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