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Podcast Episode
September 17, 2021

Senegal with Dr. Ibrahima Aidara … the solemn significance of Senegal ’s Gorée Island, the largest …

Report
July 7, 2011

Senegal … This report, Senegal: Assessing Risks to Stability, is part of CSIS study series Stress Testing African States that examines the risks of instability in 10 African countries over the next decade: Angola, Botswana, Ethiopia, Ghana, Kenya, Nigeria, Rwanda, Senegal , Sudan, and Uganda. The …

Podcast Episode
October 29, 2020

investment in specialized care, Senegal's exemplary pandemic response … Background Reading:  How Senegal has set the standard on COVID-19 – Rumbi Chakamba  Senegal 's quiet COVID success –&nbsp …

Commentary
March 4, 2020

which includes Saint-Louis, Senegal . Many of the city’s churches … Democratic Republic of the Congo, Senegal , Tanzania, and Zambia. Perhaps …

Commentary
August 27, 2021

with The Economist based in Senegal. The discussion, moderated by Judd Devermont, has been edited for purposes of brevity and clarity. JD: Can you describe the phenomenon of unfinished buildings in sub-Saharan Africa? KS: Sure. You see in a lot of African cities, and perhaps particularly in Dakar where I'm based, a whole array of buildings that seem to have been partly constructed—and the construction is stalled for quite a long time. For example, a six-story apartment building all finished in concrete, but with no fixtures, paint, or windows put in. And when you ask about them, it is often that they've been there for quite some time, five or six years even. And then you also see smaller-scale buildings, sort of family homes, that are partly constructed, sometimes partly lived in, but where there's maybe a second floor going up that hasn't been finished, or even just a small home that's partly built but sits there for a very long time. So there's this landscape of kind of unfinished buildings, sometimes just slow construction, but often just stopped, and it really dots the landscape in a lot of African cities. JD: Your article for The Economist does a very good job of explaining some of the factors behind unfinished properties. Can you walk us through those? KS: There are a range of factors behind this phenomenon, and it obviously varies by country, but there are some common themes. One, it is quite difficult to get a loan for construction, particularly for large projects. So developers have to put up a lot of collateral and they don't always have access to that. Instead, some start to build and hope that they can get prospective tenants to put in a deposit on the basis of a partly finished building, and that money would then allow them to continue. But that doesn't always work out, so you can end up sort of stuck from a financial point of view. And a similar problem happens with family homes. Mortgages are hard to come by. The financing just isn't there. And so again, people start to build with what money they have, and when they get a little bit more cash in from their job or from wherever they can get it, they add bricks, and they add concrete to those buildings. The problem with that of course is that it can lead to a bit of a vicious cycle. Putting money into concrete or bricks ties up that finance, and it can tie it up for quite a long time. And in that time, it doesn't really create a return for anybody. And of course that means that there's less money in the financial system. That cash could have been put into a savings account or into other businesses that would get an annual return and then allow people to build more quickly at the end. Some people are suspicious of saving in those financial instruments. That can seem surprising, but when you consider that in a number of different countries, inflation can be quite high, it can make sense to put money into concrete or at least something solid that you can point to and hold on to. There are some interesting reasons that really came through talking to folks here in Senegal about why they start building when they know they don't have the full funds to finish. For example, some pointed out to me that if you start building, it's easier to encourage family or friends to help you finish. You can say, "Hey, look, I just need to kind of get this last bit done, can you pitch in a little?" And then almost the flip side of that, people also said to me that in Senegal, there's a very strong culture of helping out family members, and many people I spoke to were doing that. They were sending money to their mother or to their family in another part of the country, but there are also limits to how much people want to do that. And so some said to me, “Look, by putting it in concrete, I can say ‘this is not liquid.’ I can't just withdraw cash to respond to every demand. And it allows me to say ‘I can't help you out this time,’” whereas if it's in a bank account, they said, “In good conscience, I couldn't not send the money to a relative.” In other parts of Africa, weak property rights can be a factor. People choose to build because they don't have a solid legal foundation, or the laws are a bit loose on who really owns the land. And so building can be a way to kind of secure your land as well. JD: There are some obvious prescriptions based on the factors that you identified. Can you elucidate some of the obvious and less obvious ways that we can reduce the number of unfinished buildings and properties? KS: There are a number of responses, starting with things like property rights. Trying to clarify property rights can really help by ensuring people feel that this land is theirs and that they can build on it when it is appropriate for them rather than building to secure it. Perhaps the single biggest thing is access to financing for construction. And I think that's particularly important for building the family home, where there's research suggesting that in the vast majority of African countries, even the cheapest new housing is unaffordable for the majority of people given average incomes and average mortgage costs. There is also a role for African governments to play in helping finance mortgage systems and really thinking about what kinds of houses are being built. This is anecdotal, but I'm struck by the amount of luxury or high-end housing being built in a number of African capitals, including here in Dakar, some of which is clearly standing empty. Some people I talked to speculated about money laundering being a factor in some of that. But I think there's clearly a role for government in trying to promote and indeed potentially fund public housing that's aimed at a lower-income segment of the population. JD: How do we address the issue of unfinished buildings that are already standing? KS: That's a great question. It's difficult because someone normally has a claim on any given piece of land or any given unfinished building, even if they've not touched it for a long time. The Nigerian government is planning to take over some buildings in the capital, Abuja, that have been sitting there for a particularly long time on the basis that there is a need to use the land more effectively given pressing social problems. I think that is worth thinking about, and clearly there needs to then be thought given to some form of compensation for people who, for various legitimate reasons that we've discussed, may have been unable to finish. But at some point, when you see plots of land in prime urban locations not being used for half a decade or a decade, that becomes an issue of public concern. That same frame of “How do you optimize urban land use?” can be applied to questions of buildings that have sat there for a long time. JD: There is clearly a role here for international partners, perhaps in investment and financing, or skills transfer around property rights and standardization. From your point of view, what are the ways that Africa's international partners—whether foreign private sectors or governments—can be helpful in addressing this challenge? KS: In Senegal, the World Bank has been trying to help to make borrowing a bit more affordable by providing backstop guarantees for mortgages. I think for financial institutions outside Dakar, that's an important role. Also critical, as you mentioned, is the provision of urban planning advice. The rate of growth in a number of African cities is just staggering. Getting that good technical approach in and helping advise on that process . . . there is a sort of window in which to do that where it can make an enormous difference. I think the international community does not pay enough attention to urban issues in Africa. I was just in Lagos, and the traffic and infrastructure challenges are so important; the impact they have on productivity and the quality of people's lives is enormous. More focus on these issues would be really valuable. Judd Devermont is the director of the Africa Program at the Center for Strategic and International Studies in Washington, D.C. Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s). © 2021 by the Center for Strategic and International Studies. All rights reserved.

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