African Real Estate Development

Part
01
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Part
01

Land Ownership: Ivory Coast

Land ownership in Ivory Coast is mainly governed by the 1998 Rural Land Law. Land in Ivory Coast is classified as
Land can be only be owned freehold by the Ivoirian government, public entities and Ivoirian citizens. Foreigners are only permitted to obtain land through leases. The registration of land is done at the Land Registry.

LAND OWNERSHIP LAWS AND REGULATIONS IN IVORY COAST

  • The Rural Land Plan (Plan Foncier Rural, PFR) which was introduced in 1989 and financed by the World Bank was the first practical effort to tackle the complex issue of land tenure security in Ivory Coast.
  • The pilot project was designed to “survey existing land rights and land use; establish the limits of each plot through investigations carried out at the village level; and develop technically and financially feasible methods for registration of land”.
  • The Rural Land Plan and the Rural Land Management and Community Infrastructure Development Project (Projet National de Gestion des Terroirs et d’Equipement Rural, PNGTER), introduced in 1997 and also financed by the World Bank became the foundation for the current legal framework for land ownership in Côte d’Ivoire.
  • The 1998 Rural Land Law (Loi relative au domaine foncier rural, Loi n°98-750 du 23 décembre 1998 modifiée), in addition to “three decrees and 15 implementation orders” instituted between 1999 and 2002, was targeted at improving land ownership security by modifying customary rights into private land rights governed by the state.
  • The law pioneered the explicit recognition of customary landholdings, if only for a transitional period. The law made provision for an initial period of ten years after enactment.
  • In 2017, the World Bank sponsored the Cote d'Ivoire Land Policy Improvement and Implementation Project in order to resolve the challenges associated with the 1998 Rural Land Law.

FREEHOLD, FOREIGN OWNERSHIP AND RIGHTS OF TITLE

  • There are two land tenure systems in Côte d’Ivoire, customary and statutory. The customary system has always been dominant, it accounts for over 98% of the rural land in the country.
  • Different communities have different customary rules, but the country has basic customary laws which are common in every part of the country. The statutory system is only applicable when land is being registered, and this has only been achieved for around 2% of rural land so far.
  • The 1998 Rural Land Law, as revised by decrees, projected that by 2019 Ivoirian citizens who possess customary ownership rights to land will register their land and acquire a personal land title. Foreigners can acquire emphyteutic leases. Theoretically, the customary land tenure system will no longer be in use after 2019.

The major customary forms of land ownership in Côte d’Ivoire include the following:

  • Rights of permanent use: These rights are the birthright of individuals who are descendants of the original occupants of a particular land. Such rights are passed from one generation to another.
  • Rights to use and benefit from land: People who migrated from another part of Côte d’Ivoire as well as from other countries can acquire land from a “tuteur”, a local guardian and they repay with “token gifts and loyalty or, occasionally, with more substantial payment in the form of cash, product or labor”. Much of the cocoa and coffee in Côte d’Ivoire’s is produced by lands held in this way by migrants.
  • Leasehold rights: People who have been granted leasehold rights to a particular land must enter into a formal agreement with the owner of the land. The leasehold rights are customary rights if the land is unregistered.

The major statutory forms of land ownership in Côte d’Ivoire include the following:

  • Land certificate: Individuals who have a land certificate must apply for a land title after three years. This only applies to Ivoirian citizens.
  • Freehold rights: Individuals who hold the right of title to a particular of land possess freehold rights. Only the Ivoirian state, public bodies and Ivoirian citizens are allowed to own land in rural areas.
  • A land title right can be sold to another Ivoirian or passed on to descendants. The land can also be leased to foreigners or private companies, but cannot be sold to them.
  • Emphyteutic lease: This type of lease is most secure form of land tenure for foreigners and it gives the holders of the land tenure rights for a period of 18 to 99 years which is heritable and alienable. Although they do not own the land, they possess all that is built and produced on the land.
  • Foreigners are not allowed to have freehold ownership of land in Côte d’Ivoire.

LAND REGISTRATION PROCESS AND REGISTRY

Registering land in Ivory Coast involves six procedures:

Part
02
of seven
Part
02

Land Ownership: Mali

In Mali, much of land tenure and rights of title are commonly administered by legally recognized customary laws, especially in rural areas. However, based on the legal framework in Mali, citizens can hold a freehold interest to a portion of land, which grants them full property ownership. In addition, foreigners can also own various portions of land, as provided by the Malian Investment Code. While Mali has several rights of title and land tenure systems, the common ones are ownership rights and leasehold rights. It appears that Mali has no land/title registry, as reported by the US Department of State. This was due to the presence of various land administrations at all levels of government — an issue a World Bank document referred to as 'legal pluralism'. Below, is a deep dive into our findings.

LAND/PROPERTY LEGAL FRAMEWORK

  • In Mali, the legal frameworks governing land rights include the 1992 Constitution of the Republic of Mali, the amended 2000 Land Code, and the Agricultural Orientation Law which was newly enacted as the Agricultural Land Law.
  • The 1992 Constitution of the Republic of Mali provides citizens with the ability to own and protect their properties, the amended 2000 Land Code focuses on state properties and land code, while the Agricultural Land Law redefines state-owned land.
  • There is also the Pastoral Charter which recognizes pastoralists and grants them access to natural resources.
  • In all these, however, and from a pragmatic point of view, customary laws govern most land rights, especially in rural areas. Furthermore, the Agricultural Orientation Law/Agricultural Land Law recognizes customary laws and its administrations.
  • Under customary rights, "traditional leaders allocate usufruct rights over land and its resources in a communal approach to land ownership and use."

RIGHTS OF TITLE AND LAND TENURES

  • According to the US Department of State in its 2018 Investment Climate Statements, the Malian National Land Agency (DNDC) provides three types of land properties or tenure types:
    • Rural concession: This permits grants to rural concessions to state lands that are unregistered. "The concession is conditional upon the agreed development within an established time frame."
    • Permit rights: This permit grants occupation permits, including the residential use of land, to urban land to individuals.
    • Use of land by pastoralists: This permit allows pastoralists to access to natural pasture and fallow land.
  • In summary, among the various rights of titles and land tenures, including ownership and leasehold rights, the ownership permit allows individuals/entities to hold full property ownership to landed properties.

LAND OWNERSHIP: WHO CAN OWN/OBTAIN LAND

  • Under the legal framework of Mali, individuals, entities, and the state can own land, as well as transfer land. A new law enacted in 2017 also empowered rural communities to collectively own some lands.
  • As already highlighted, the Land Code allows holders of concessions and leases to convert their rights to ownership interests.
  • As per customary laws, land can be obtained by the following means (quoted verbatim):
    • Founding or conquering a village.
    • Inheritance, gifts and loans.
    • Leasing and sharecropping.
    • Pastoralists’ exercise of use rights.

LAND OWNERSHIP: FOREIGNERS

  • As part of the advantages guaranteed to foreign investors, the Malian Investment Code allows foreign entities, such as investors, to hold land interests.
  • As per the law, "foreigners, who intend to acquire land, must comply with the laws governing the acquisition and protection of land and property rights in Mali." The foreign entity would then register the property in a five-stage process, as described in the next subheading.

LAND/TITLE REGISTRY

  • "The Land Code requires each of the 703 communes in Mali to set up a land register and conduct a land inventory."
  • However, the US Department of State in its 2018 Investment Climate Statements disclosed the lack of a nationwide land registry in Mali, an issue that has led to competing claims for land. It attributed this problem to differences in government structure, "as the local, regional, and national level of government are all involved in land administration." A World Bank document corroborated this report while referring to it as "legal pluralism."
  • Furthermore, the report showed that it is common for investors, entities and communities to encounter "multiple attributions of the same land." Due to this fuzzy land registration practices, there arise frequent conflicts. This report cited a case where the government ordered the demolition of houses built in lands allocated by the state for the construction of housing projects.
  • According to data collected by the World Bank’s 2019 Doing Business Report, "registering properties in Mali requires 5 steps, takes 29 days, and costs 11.1% of the property value."
  • Furthermore, these steps include:

  • In view of the new Agricultural Land Law in 2017, it is expected that this issue of "legal pluralism" would be solved. Since most land rights are governed and administered by customary rights/laws, this new law creates two new registers — the land possession registry and the land transaction registry. They will be managed by municipal authorities such as the mayor.
  • Also, the law establishes two institutions on the village level — the Village Land Commission and the National Farmland Observatory. The former will "facilitate consultations on land issues and the formalization of land rights." The later will "document land issues and monitor the implementation of the law and land management practices in rural areas." It will also regularly publish reports on the state of land in the nations.

THE AGRICULTURAL LAND LAW (LOI FONCIERE AGRICOLE — LFA)

  • This law was based on the 2006 Agricultural Orientation Law (Loi d’Orientation Agricole — LOA). It was adopted by the Malian National Assembly and enacted by the Malian President in 2017.
  • The main highlight of this new law is the redefinition of state-owned lands. Previously, unregistered customary lands were classified as state lands. However, with this new law, "no land held under customary laws shall be included in state lands."
  • This new law also creates two new types of title, the customary land certificate (attestation de detention coutumière) and the certificate of land possession (attestation de possession foncière). These new certificates are highly beneficial to local communities and farmers because "they can be transmitted to their heirs, sold, and used as collateral for loans."
  • This law also strengthens customary laws, which grants rural communities the ability to own some lands collectively. In addition, it also strengthens the institution and administration of customary laws.
  • Lastly, it granted the allocation of 15% of state-owned lands to women in the country, strengthening their access to portions of land.

RESEARCH STRATEGY

To address this request, we began by searching for credible reports and studies that survey the state of land ownership in Mali. This strategy led us to various credible reports that we have used to address this request. However, there were two reports published by the United States Agency for International Development (USAID) and the Oakland Institute that were quite outdated. These articles provided information on the legal framework and the land tenure system of Mali. Hence, we searched for recent reports from global organizations such as the United Nations and the World Bank. However, these sources provided only basic information on land ownership in Mali. We searched the USAID and the Oakland Institute databases for an updated version of these reports but found none. We also searched for local articles and publications but found none.

Lastly, we searched government databases in Mali such as the Malian National Land Agency (DNDC) database for information on land ownership laws. However, we could only find information on its directories. Because of the lack of recent reports, we have used these reports published by the USAID and the Oakland Institute in addressing this request because of their credibility and relevance in detailing the land property rights in Mali. Also, while land laws are not frequently updated, we checked for any major or notable update on these laws. This was to ensure that we provided current information. The only notable update we found was the enactment of the Agricultural Orientation Law, now known as the Agricultural Land Law, in 2017. The updates brought about this law has been highlighted in the findings section above. With this, we could accurately combine these reports to provide current information.

Part
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Part
03

Land Ownership: Senegal

Land ownership in Senegal is mainly governed by the National Domain Law. Land in Senegal is classified as being under the national domain or the private domain. Land is also categorized into zones as urban, classified, territorial, and pioneer. Land can be owned freehold, even by foreigners. The rights of title can be acquired from the Land Registry.

LAND OWNERSHIP LAWS AND REGULATIONS IN SENEGAL

  • In 1964, the government of Senegal introduced the National Domain Law to promote land access and to facilitate the productive use of land.
  • The National Domain Law categorized around 97% of Senegalese land as state-owned. The remaining 2–3% of land which was registered under colonial rule as freehold maintained its private ownership.
  • The National Domain Law categorized land to be within urban, classified, agricultural, or pioneer zones. The control over land was also decentralized to local governments (municipalities and rural communities).
  • Customary law governs most land in Senegal to a great extent. Land in rural areas is held communally by families and their descendants, although ownership rights have gotten highly personalized over time.
  • Land loans, leases, and gifts which are governed by local customary law are commonplace in most areas of Senegal.

FREEHOLD AND FOREIGN OWNERSHIP

  • Three types of land tenure are legally recognized in Senegal. They are ownership, leasehold, and occupancy rights. Individuals and entities can acquire land ownership under formal law and possess “all freehold rights, including the right to exclusive possession, use, and transfer”.
  • Individuals or entities can acquire leaseholds of private land or land in the national domain that is transferable. Leases can be obtained for up to 30-year terms and can be renewed.
  • There are two types of occupancy rights: “surface rights and occupancy under administrative certificates (ACs)”.
  • Surface rights can be obtained for urban land for a period of 50 years which can be renewed once for another 50 years. Surface rights can only be transferred after five years and a surface right holder can obtain freehold ownership rights after payment of fees, taxes, and the land’s administrative cost.
  • Occupancy under administrative certificate is temporary and can be revoked by the government and converted to public land use. The administrative certificate can be converted to leasehold if the land undergoes development in line with an approved plan.
  • Land in the Senegalese national domain cannot be sold. The formal land-sale market is restricted to privately held freehold land.
  • The quantity of registered freehold land which was 2–3% of total holdings as of 1964 has increased because some people who held surface rights converted them to freehold rights. However, the number of registered freehold land is believed to be quite small as a result of the limited number of informal settlements which have been regularized as well as the high cost of acquiring freehold title.
  • Foreign ownership of property in Senegal is not discriminated against. Foreigners can also own 100% of business in most sectors.
  • Senegal operates the reciprocity principle, which states that “foreigners are only allowed to invest in freehold property when locals are allowed to do the same in the foreigner's country of origin”.

LAND CLASSIFICATION AND RIGHTS OF TITLE

  • Land in Senegal is classified as being either in the national domain or the private domain. Land in the national domain comprise state land, which is further categorized as “either non-transferable public land or transferable state land”. Land in the private domain consist of land which is “held by individuals or entities under registered title documents”.
  • Land in Senegal is also categorized by zone; namely urban, classified, territorial, and pioneer.
  • Urban zones (zones urbaines) are lands in community settlements or urban areas.
  • Classified zones (zones classes) include lands which are governed by specific laws, such as “classified forests, national parks, and other government protected areas”.
  • Territorial zones (zones de terroir) include land used for agriculture (including pastureland) and forests in the national domain which are non-classified.
  • Pioneer zones (zones pionnières) include all other land.
  • Lands in the territorial zones are managed and allocated by rural councils, while lands in the pioneer zones are governed by the central government. The central government can decide to reclassify selected territorial land as pioneer zones for public utility use and removed them from the control of the rural councils.
  • About one-third of urban land is in informal settlements. Some residents obtain claim rights to their plots after acquiring an occupancy certificate issued by the government or after obtaining informal documentation showing proof of a land purchase or lease. A foreigner can purchase land in Senegal either from a person or the government.

LAND REGISTRATION PROCESS AND REGISTRY

Registering land in Senegal involves five procedures:
  • Obtaining a certificate of non-encumbrance from the Land Registry.
  • Engaging the notary to draft and execute a promissory agreement.
  • Filing a request at the Director of Taxes and Property to obtain a transfer authorization.
  • Writing of the deed of sale by the notary after receiving the Director's approval.
  • Forwarding the request of change of ownership by the notary to the Land Registry.
  • When buying land from the government, the buyer approaches the Government's investment centre, APIX (Agence Nationale Charge de le Promotion de L'investissement et des Grands Travaux). It is required for the Cadastral service to issue a map of the specified land, and to “state whether it is public domain, private, or national domain land”.
  • For property purchased from SICAP SA (Cape Verde Real Estate Company), the land title can be obtained through the Directorate of Legal Affairs of SICAP SA.

Part
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Part
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Land Ownership: Democratic Republic of the Congo

The Democratic Republic of the Congo operates a Land Tenure system where the state owns all the land in the country. The state grants concession to land to natural citizens and foreigners, however, the kind of concession that can be granted to foreigners is limited. Below, we have provided more details.

Freehold Ownership and Rights of Title

  • Congo operates a Land Tenure system whereby all the land in the state belongs exclusively to the Congolese state as stipulated in the 1973 General Property Law (Law No. 73-021). However, all natural or legal persons/entities can obtain a right to possession of land in the country through a concession contract. Where land is unallocated, especially in rural areas, the constitution permits customary law to govern use-rights of the land.
  • Land can be possessed freehold in the Democratic Republic of Congo in the sense that a person can have the right to a piece of land in perpetuity with no time limit, but the person must be a natural Congolese national.
  • This kind of ownership is called "Concession in Perpetuity" and grants the beneficiary the right to enjoy the land perpetually as long as the obligations and conditions upon which the concession was granted are being met. The beneficiary has ownership of everything on the land, such as building and plants and anything built and/or planted on the land.
  • The conditions upon which the land can be revoked are limited and specified in the constitution. In such a case, the concessionaire will be compensated for any building or plant or anything on the land of which he/she is the owner.
  • It is important to note that although this is the legally stated way of owning land, some estimate that up to 97% of all the land in Congo are administered via customary law and land ownership is mostly based on inheritance.
  • Even in urban and semi-urban areas where land possession is via constitutionally stipulated concession described above, "an estimated 77% of residents reportedly own their own plots, but only about 30% have rights recognized under formal law."

Foreigners Owning Land and Their Right to Title

  • Foreigners can obtain a right of possession called Ordinary/Standard Concession.
  • An Ordinary/Standard Concession is a form of leasehold that grants the beneficiary the right to full enjoyment of the land as long as the value of the land is maintained and the stipulated duty is paid.
  • The term of the ordinary concession is a renewable 25-year term and the concession can only be revoked under limited and specific conditions stipulated in the constitution. The foreigner or foreign entity has full right to the land and can build/plant on it or remove any building/plant on the land.
  • In practice, once a foreign entity (a person or corporation) has acquired land via ordinary concession and built on it, the 25-year renewal is generally automatic and guaranteed after the initial 25 years have elapsed as long as the land has been developed.
  • Another kind of concession that allows a foreigner to possess land in Congo is usufructuary right. In this case, the beneficiary has the right to enjoy the land for a renewable 25 years but must maintain the land in its original state and has no right to dispose of any building on the land except in specific circumstances.
  • Foreign investors building in DR Congo are generally aware of the Land Tenure system but do not mind because the 25-year concessions are generally automatically renewed and concessions can easily be transferred to another entity/person.
  • The state has the obligation to safeguard the concessionaire's undisturbed use of the land for the duration of the concession.
  • Land possession in urban and semi-urban areas are generally governed by the constitution and the right to title explained above generally applies to all land dealings.
  • Generally, corporations or foreigners seeking large land holdings get the right to land through concessions as enshrined in the formal law or constitution from the government in both rural and urban areas. However, foreigners seeking small land holdings in rural areas are generally subject to customary laws which are administered by chiefs.

Land Registry

  • The Democratic Republic of the Congo has a land registry which operates under the Ministry of Land Affairs.
  • The Ministry of Land Affairs is responsible for the administration of all the land in Congo, including those in the rural and urban areas.
  • In addition to the land registry that handles land registrations, the Ministry of Land Affairs has other departments that handle "surveys, management of state land concessions (including allocation of concessions), and provide a land-dispute service."
Part
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Part
05

Construction Costs: Ivory Coast vs. Mali

A single-story, detached house of average quality with a masonry or a timber frame costs $196 per square meter in Mali and $626 per square meter in Ivory Coast. Below is an overview of the findings.

Mali (2011)

  • A single-story, detached house of average quality with a masonry (brick or block) or a timber frame goes for the price $196 per square meter.
  • A two-story attached house, mass market, center unit in terrace/row of four units goes for the price of $223 per square meter.
  • A low-rise apartment, mass market with a concrete frame, brick or block infill and a walk-up goes for $403 per square meter.
  • A high-rise apartment of average quality with a concrete frame and a brick or block infill goes for $456 per square meter.
  • The cost of cement imported by Mali in 2014 was $250/ton.


Ivory Coast/Côte d’Ivoire (2011)

  • A single-story, detached house of average quality with a masonry (brick or block) or a timber frame goes for the price $626 per square meter.
  • A two-story attached house, mass market, center unit in terrace/row of four units goes for the price of $678 per square meter.
  • A low-rise apartment, mass market, with a concrete frame, brick or block infill and a walk-up goes for $1,007 per square meter.
  • A high-rise apartment of average quality with a concrete frame and a brick or block infill goes for $1,272 per square meter.
  • The cost of cement imported by Ivory Coast in 2014 was $200.
  • Since 2011 the Building and Construction sectors has been one of the sectors leading in growth. Approximately 40.5% of imported construction equipment from 2016 to 2017 was imported from the U.S. The continuous demand for cement shows how dynamic the sector is and how great the need is for more suppliers.

RESEARCH STRATEGY

To address this request, we began by searching for credible readily available studies that compared the cost of construction between the African countries Ivory Coast and Mali. We examined credible reports from sources such as the World Bank, Export.gov, Commercial Payments International (CPI), and many more. Our search yielded a source from the World Bank which compared the cost of construction between the Ivory Coast and Mali, this source was published in 2018 but contained data from 2011. We noticed that the World Bank source did not differentiate between the cost for commercial and residential real estate construction in both countries. Also, the content was for 2011, which we thought was dated.

Our next approach was to search through each country for the cost of construction and then build a comparison between the Ivory Coast and Mali in terms of the construction cost for commercial and residential buildings. We searched through government databases, press releases, and industrial articles in Mali and the Ivory Coast (such as the Malian National Land Agency (DNDC), Côte d’Ivoire Data Portal, Reuters, IBIS World, and many more) for the required information. Unfortunately, this approach yielded no positive results. We were only able to find general information such as articles on the housing needs in both countries and the laws associated with acquiring lands. Nothing was found regarding the cost associated with construction.

We then decided to look at reports by real estate financiers to determine the cost of construction and examined a report by Housing Finance Africa. We specifically looked at this source because they are known to publish financial data on real estate construction in Africa. The source provided a breakdown of construction costs for building a generic 55 square meter house on a 120 square meter piece of land in some African countries such as DRC, South Africa, Nigeria, but no information was published regarding Ivory Coast and Mali. Another source published by Commercial Payments International (CPI) titled "Africa Property & Construction Cost Guide 2016" provided details on the cost of construction in 19 African countries. Unfortunately, Ivory Coast and Mali were not among the profiled African countries.

We then attempted to triangulate the information by searching for readily available lists of the top construction companies or contractors in the Ivory Coast and Mali. We looked at credible sources such as Construction Review Online, Lexology, Expat, and many others. Our aim was to use this list to find the average price each company charged for real estate construction. Unfortunately, none of the sources gave us a list of the top construction companies in the countries. Expat gave us a list of construction contractors in each country but their cost was not stated. We looked at these companies' websites for their pricing but no pricing details were disclosed. After a thorough search, we believe the latest information associated with the price of construction for Ivory Coast and Mali was compiled in 2011 and no more recent information is available for these countries.
Part
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Part
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Construction Costs: Senegal, DR of Congo

In Senegal, a residential building, particularly an average multiunit high-rise building would cost $1300 per square meter; $2,045 per square meter for a luxury unit high-rise; and $3,120 per square meter for an individual house. On the other hand, in 2016, the total cost of building a 55 square meter house on a 120 square meter piece of land in the Democratic Republic of Congo (DRC) was $51,654, which translates to $939 per square meter.

OVERVIEW OF CONSTRUCTION IN AFRICA

  • Construction costs vary greatly across the 54 countries of Africa. Researchers on the continent use various analytical methods to estimate the costs, i.e., cost per square meter and cost of a basic generic house.
  • These cost estimates are for buildings constructed in the capital cities of African countries. For instance, the costs of construction in Senegal would be represented by the costs of constructing a building in Dakar City.

1. SENEGAL Dakar

  • According to a report by AECOM, an American multinational engineering firm, the costs of construction in Senegal vary depending on the type of construction, i.e., residential, commercial/retail, industrial, hotel and others.
  • For residential construction, an average multiunit high-rise building would cost $1300 per square meter; $2,045 per square meter for a luxury high-rise unit; and $3,120 per square meter for an individual house.
  • For commercial/retail construction, the average standard high-rise office costs $1,330 per square meter; $2,170 per square meter for luxury high-rise offices; and $1,745 per square meter for a major shopping center in the central business district.
  • For industrial construction, a light-duty factory would cost $1,195 per square meter versus $1,915 per square meter for a heavy-duty factory.
  • For hotel construction, a 3-star budget hotel would cost $175,000 per square meter; while a 5-star luxury hotel would cost $412,000 per square meter; and $520,000 per square meter for a resort style hotel. Under other types of construction, it costs $1,125 per square meter to build a multistory parking lot.

FACTORS DRIVING UP CONSTRUCTION COSTS

  • Research did not indicate whether labor costs and customs duties drive up the costs of construction. Instead, the construction costs in Senegal are affected by high cost of land, high cost of financing, price speculation and inadequate supply.
  • In Senegal, there are few developers and many speculators primarily targeting higher income earners. Rents and property prices vary depending on three key factors: geographical location, architectural plan and design, and the quality of material used for construction.
  • Speculation is leading to price increases in suburbs in Dakar. Additionally, high interest rates of 7.62 percent are also driving the cost of rents in the urban areas, leading to high costs of construction.

2. DEMOCRATIC REPUBLIC OF CONGO (DRC) Kolwezi

FACTORS DRIVING UP COSTS

  • Doing business in the DRC is difficult as the country is ranked 184 out of 190 for ease of doing business.
  • Conflicts, corruption and mismanagement of resources have undermined the country’s capability of conducting business.
  • In the real estate sector, the country lacks proper legal and political frameworks necessary to create an environment conducive to conducting real estate business.
  • The construction sector suffers from a very low number of property developers. Moreover, there are no institutions specializing in funding real estate projects.
  • Poor logistics and warehousing services in the country affect cement imports, further undermining the potential of real estate in the country.

RESEARCH STRATEGY

To uncover information on how construction costs vary between Senegal and the Democratic Republic of the Congo (DRC), we started by looking into real estate development and construction reports published by leading infrastructure and real estate development companies. In this regard, we examined a report by AECOM, an American multinational engineering firm, which contained information on Senegal. We then looked at reports by real estate financiers to determine the causes of the high costs of construction in the two countries. On that note, we examined a report by Housing Finance Africa, which broke down the construction costs of building a generic 55 square meter house on a 120 square meter piece of land in the DRC. We also examined local news reports highlighting the most data as opposed to reports that depend on historical data. For Senegal, we uncovered more recent construction data, while for the DRC, the most recent and detailed data on construction costs was from 2016.

Part
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Part
07

Aid/NGO Worker Housing: Mali

Even though we were unable to fully answer the research question, we used the example of the United Nations' international humanitarian workers to address parts of the research question. We determined that in the UN, international employees are paid a housing allowance that is approximately 10% of their net salaries, an amount that we calculated to be high enough for them to afford high quality housing when on international duty in African countries like Mali. A detailed overview of our key findings follows below.

KEY INSIGHTS

  • After determining that information on the general housing/accommodation market for foreign aid and NGO workers working in Mali was largely unavailable in the public domain, we targeted the United Nations in our search for insightful information on the research question.
  • The United Nations uses a common system of salaries and allowances for all its employees working in various UN agencies.
  • In UN agencies like UNHCR, international staff are commonly referred to as P staff and they are "generally recruited to serve abroad for functions which require a high level of functional and managerial skills and involve a supervisory responsibility."
  • According to the UN salary scale that was published in January 2019, highest level of P staff i.e. P1 to P5 earn a net salary of between $106,761 (highest level of P5 staff) and $50,337 (highest level of P1 staff).
  • According to the UN salary scale lowest level of P staff from P1 to P5 earn a net salary of between $87,108 (lowest level of P5 staff) and $37,012 (lowest level of P1 staff).
  • A 2017 blog article on Career Point Kenya estimated that international UN employees including those that work in Kenya are paid a house allowance that is approximately 10% of their salaries.
  • With this information, we estimated that the highest level of P5 UN staff are paid a house allowance of $10,676 per year (10% of $106,761) while the highest level of P1 UN staff are paid a house allowance of $5,033 per year (10% of $50,337).
  • On the other hand, we estimated that the lowest level of P5 UN staff are paid a house allowance of $8,710 per year (10% of $87,108) while the lowest level of P1 UN staff are paid a house allowance of $3,701 per year (10% of $37,012).
  • We this concluded that on average, UN international staff of the P category are allocated between an estimated $3,701 (lowest) and $10,676 (highest) in housing allowance. This applies to Mali because as mentioned earlier, the United Nations uses a common system of salaries and allowances for all workers in all countries.

HOUSING AVAILABLE TO WORKERS

RESEARCH STRATEGY

We commenced research by searching for information on the housing/accommodations market for humanitarian aid and NGO workers in Mali. We first targeted major world NGOs like the United Nations and USAID in our search for this information. However, after doing a thorough search in this type of resources, we were unable to determine the general number of humanitarian aid and NGO workers in Mali. Next, we targeted global news and statistical resources like Reuters, CNN, Forbes, IBIS World, and Statista in our search for any relevant information that we could use to address the research question i.e. information on the housing market for NGO and humanitarian workers in Mali. After doing an exhaustive search in this type of resources we were only able to identify general information on humanitarian aid in Africa, with specific information that could be relevant to research highly unavailable. Lastly, we targeted the government of Mali resources such as the Ministry of Foreign Affairs and International Cooperation, Ministry of Housing, Lands & Urbanism, and Ministry of Health in search of information that we could use in research. However, this strategy also proved unfruitful prompting us to switch gears.

We targeted major NGOs operating in Mali such as UN and USAID in our search for information that could be insightful in regard to the research criteria. After going through the publicly available resources for these organizations, we determined that information of UN and UN agencies provided the best picture on money allocated to housing for international workers and quality of housing available to international workers. Consequently, we did an exhaustive search for relevant information and using educated assumptions and calculations/triangulation, we were able to provide some insightful information in relation to the research question.
Sources
Sources

From Part 05
Quotes
  • "Although consultants can be used to analyze and improve processes, construction managers are required to have good project management skills and to execute projects on time with the required quality level. However, during our fact-finding missions in Angola, Cameroon, Côte d’Ivoire, Ethiopia, Kenya, and South Africa, the shortage of managerial skills was often cited as a big constraint for scaling up affordable housing delivery"
  • "The high construction costs and the lack of affordable land are the two biggest factors affecting housing affordability."
  • "The timely supply of building materials of required specification and quality is a major concern for stakeholders in the construction and housing sector because of its direct impact on construction costs."
From Part 06
Quotes
  • "There are few developers and many speculators who primarily target higher income earners. Rents and property prices depend on geographical location, the architectural plan and the quality of material used for construction."
Quotes
  • "Doing business in the DRC is difficult, with the country often considered to be one of the most challenging business environments in the world."
  • "In the World Bank’s Ease of Doing Business Survey for 2018, the DRC was ranked 184 out of 190 countries, reflecting the poor business environment that Investors are likely to encounter. "