Crisis Update

Impact of the crisis on my business

The spreadsheet where I keep track of cashflows in the real estate business has unfortunately, but unsurprisingly gotten a little bit more interesting lately. Things were fine and dull until November, but then the crisis hit and not everybody managed to pay their rents.

What’s happened is that the tenant of the main house has managed to hold up pretty well, mostly thanks to the main tenant living in France and having family using the house in Abidjan.

The shops in the same compound as the house, on the other hand, are heavily impacted by the crisis.  The one selling clothes says that nobody buys clothes since the crisis started and is contemplating terminating the tenancy.  The other one selling cooking gas does not manage to resupply stocks and has no gas to sell.

The apartments in Yopougon are doing remarkably well.  There have been missed rents, but all of them paid in February and the business activities the tenants conduct for their livelihood seem to have slowed down a bit, but not stopped altogether.

 

From my perspective a few lost rents during the crisis is no big deal, and I think everybody except the shops will manage to catch up once the crisis ends. That is, if it ends within a few months.  If it keeps going for many months or years, it’s a different story.

Impact on the Ivory Coast

As to how the crisis impacts impacts the Ivory Coast, it looks a bit like those in the informal sector with small scale entrepreneurial “getting by” activities are doing relatively better than the middle class or government employees who are hit hard by the ongoing banking collapse. The former group don’t have bank accounts and don’t depend on whether Gbagbo manages to pay salaries or not.

On the other hand, when middle class people are hit by the crisis it means they cut down on their middle-class consumption,  whereas poor people have to cut down on the number of meals they eat per day.