Emerald Group Publishing Limited
Copyright © 2007, Emerald Group Publishing Limited
African real estate investment
Our views and impressions of issues beyond our immediate environment are often shaped and formed by external media – we are, to some extent, dependent on them to provide the raw material for our deeper understanding. Yet, we run the risk of being provided with incomplete or imperfect information on these issues. Such a situation may well hold when we think about Africa. If Africa makes the news at all, which is not always the case, the stories and reports that we hear are invariably depressing and, in many ways, serve to reinforce many of the stereotypes that exist about this vast and diverse continent. For, what we do not generally hear about is the hard-earned and not always steady progress that is being made in many countries in Africa to transform their societies and economies to ones where they can begin to enjoy the fruits and benefits of greater freedom and prosperity.
I have been privileged to be invited to put together this special issue of Journal of Property Investment and Finance, and the papers that I have selected for this reflect many of these changes that are taking place. The names will, for the most part be unfamiliar to readers – these are authors who have not published regularly or contributed to the academic debate on real estate in the more established learned journals. For too long, their voice has not been heard and this issue is, I hope, a first step in encouraging these researchers to join the mainstream and to bring their views and perspectives to a wider audience. I hope that you enjoy reading them.
The first paper, by M.S. Ramabodu, B.G. Kotze and J.J.P. Verster of the University of The Free State, South Africa, looks at what has been considered to be for many years the economic engine-room of Africa, South Africa. This paper demonstrates the diversity of property investment opportunities in South Africa, but also emphasises the challenges that are faced here. In many respects, these are a consequence of the dramatic political changes that have taken place there over the last ten to 15 years.
We then move across the continent and look at three aspects of property markets in Nigeria, increasingly emerging as a regional economic and political power in West Africa. These are sobering in bringing to the fore some of the problems in trying to develop the type of sophisticated property market that we take for granted in Europe. The work by A. Olaleye, B.T. Aluko and C.A. Ajayi of Obafemi Awolowo University shows that, while there are some signs of emerging property market behaviour in Nigeria, there is a long way to go. There is a dearth of transaction data and the research revealed that practitioners preferred to offer their clients qualitative-based advice, believing that this was more acceptable to them. However, it would be interesting to think back into the history of the UK property market to see when the change-over started to happen here – probably not as long ago as one might think.
Linked to this is the paper by O.A. Ogunba and C.A. Ajayi who explored issues relating to valuation accuracy in Nigeria. This tried to compare progress being made by the Nigerian valuation profession against the UK profession, to see where it had got up to. This complements the earlier paper by suggesting that, for the profession to develop, there is a need for it to become increasingly sophisticated in its use of valuation techniques, with a grater focus on the investment approach rather than the cost approach.
The final paper looking at Nigeria considered a specific and very real situation there and one, which has received widespread publicity – the activities of the oil companies in the delta region of Nigeria. This paper, by P. Ogedengbe of Obafemi Awolowo University, looked at the issues around the compulsory acquisition of land. This is a contentious issue wherever it takes place, but in this situation it was particularly charged. The view that seemed to emerge was that the compensation being paid was inadequate and that the relevant legislation needs to be reviewed, to seek to ensure that adequate compensation is available. This is particularly relevant in these rural areas, where peoples’ livelihood often depended on their land holdings.
Finally, Wilfred Matipa and Ronald Barham looked at how property investment in Zambia could be facilitated by improvements in the land pricing systems used by the local authorities. As they acknowledge, such steps need to be taken extremely carefully, in often very politicised organisations, but they hold the promise of unlocking much-needed investment from the private sector.
I would hope that this will not be the last time that researchers from Africa present their work in these pages- they have much to learn from more established researchers but, as the world becomes increasingly interconnected, we also have much to learn from them.
Stephen BrownGuest Editor