Posted by: Martin | January 21, 2012

A Gamble

Ok, I have bought cars #2 and #3, Toyotas of year 2000 and 2001.  Thought I might as well try to get a few ones in before the import restrictions take effect.

It’s a bit of a gamble, but in a worst case scenario the import restrictions takes effect while the cars are en route, and they get blocked at port.  In that case I’ll lose the purchase amount and the transport, which would suck, but I think it’s worth the risk.

In Senegal when they introduced similar restrictions and too old cars arrived, I think the owner was asked for a very high penalty fee, and if it wasn’t paid, the car would be auctioned off.  In Senegal though, there was over a year from the announcement of the restrictions to them taking effect.  Ivorian authorities are likely to move quicker.

Car #3

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Posted by: Martin | January 15, 2012

Import limits on used cars

I’m saying it again: Come on Ouattara, don’t disappoint now!

There’s been a lot of good news and propositions coming out of the Ivorian government, but think I’ve just found a bad one.  And it’s something that affects my business:  It seems the Ivorian government intends to introduce a ban on importing used cars older than a certain age.  The government seems to be aiming to set the limit to 5 years whereas the transport industry wants it raised to at least 10 years.

Quite a lot of West African countries have these kind of restrictions, from a quick surf I see:

Senegal – 5 years since 2003

Guinea – 5 years since 2011 

Ghana – No limit but penalty fees for cars older than 10 years (just like in the Ivory Coast right now)

Nigeria – 15 years (according to the Import prohibition list of the Nigeria customs) It seems that they started with a 5 year limit in 2001 and then progressively increased it.

The case for a restriction

The thinking behind these restrictions seems to be:

  • National pride – not wanting their country to be a dumping ground for old cars from the developed world
  • Aesthetics – a wish to make their country look better with more new cars on the roads
  • Environment – old cars pollute more
  • Congestion – with less cars imported, congestion on the roads could be mitigated

and maybe:

  • Protectionism – even if there is no domestic car industry, the limit could be an attempt to promote one or at least promote domestic assembly of car parts

The case against

And here’s why I still think these import restrictions don’t make much sense:

  • Cars up to 5 years old are expensive – a vast majority of Ivorian citizens can not afford them. A small elite that can afford new cars (and don’t use taxis) won’t be affected, but transport costs for everybody else will increase, thus increasing poverty, and reducing mobility and business activity.
  • Public transport in Abidjan is very limited, and has to a large degree been replaced by Woro-Woros (Taxis taking multiple passengers on a hop-on hop-off basis along a set route).  With a 5 year limit, the return on importing a Woro-woro is so low that it doesn’t make economic sense to import cars to make Woro-Woros. So that would mean game over on expanding my taxi business in it’s current form. Also, transport costs would go up as the supply of Woro-Woros grind to a halt making basic transportation unaffordable for some Abidjan residents.
  • But prices won’t go up so much so it makes sense to import 5 year old cars, due to the existing car park.  A limit actually causes old wrecks to be more valuable, so everybody will keep patching up the existing cars as long as possible. Contrary to the intention of the import restriction, the car park is likely to get older, nullifying any pride, aesthetic, or environmental benefits. You kind of get a Cuba situation (though Cuba happened to have quite beautiful cars prior to Castros revolution).
  • The elite that can afford new cars aren’t likely to buy many small Toyotas, so there won’t be a trickle down of cheaper cars suitable for taxi service.
  • It will create incentives for smugglers and for corruption of custom officers.
  • Government revenue through import duties will go down  as fewer cars will be imported – and as mentioned in the Customs post import duties is a very important part of government revenue.  Admittedly though,  the Ivorian government is also proposing to reduce import duties which I think is a good thing, but does contributes to reduce revenue.

All in all it’s a bit like a tax that – like all taxes – has a negative effect on people that pay it (in this case ordinary Ivorians paying for transport) but that instead of increasing revenue to the government does the opposite.  The only positive thing I can see is that it’s likely to mitigate the trend of increasing congestion in Abidjan a bit.

Senegal has had a strictly imposed 5 year limit for quite a while now. Here are some of the reactions to it I’ve picked up on Senegalese Internet forums:  [Sorry about the French, too tired to translate now]

Voila un système qui en fait provoque le contraire de ce qui est prévu. Qui au Sénégal a les moyens de se payer une voiture de moins de 5 ans? Qui ? Une certaine élite voila. Donc le résultat est que en fait les propriétaires de vielles bagnoles continuent de les rafistoler étant donné qu’ils n’ont pas les moyens de s’en acheter une autre et c’est en fait cela qui contribue à donner cette image de parc automobile poubelle.

Avec cette loi, la moindre poubelle vaut une fortune. Le Sénégal est le  pays d’Afrique de l’ouest où le parc auto est en aussi mauvais état

la seule motivation etait que Wade veut prèserver ses actions et celles de sa famille dans l’usine de montage à thies vos appreciations sont fausses vous confondez le confort de vos gros cylindre avec les vèhicules morgue roulante sur nos routes.le renouvellement de notre parc automobile se fait à deux niveaux, les riches et voleurs, ils n’ont pas de problème car l’augmentation des voitures neuves ne concerne que la minoritè riche de la societè mais fait un tour dans nos garages et l’interieur ,tu te rendras compte qu’il y’a un apprauvissement de notre parc automobile

le renouvellemt de nos vehicules ne se fera jamais de l’interieur seulement 5% des senegalais ont les moyens de par leur revenus de se tapper un vèhicule neuf et autre echec les accidents deviennent de plus en plus cruels

vous parlez de cette mesure de limitation des voitures importèes, pour moi c’est une grande BETISE, le senegal ne fabrique pas voiture, et ces dernieres coutent maintenant tres chères là bas, essayez de prendre un taxi 90% des taxis,une fois dedans tu pries pour arriver chez toi sans problème

Posted by: Martin | January 14, 2012

Paved roads

Islands of paved roads

One thing I noticed last time in Abidjan was that there are plenty of areas of the city that are like islands of paved roads that can’t be reached with paved roads. One would think that main connecting roads would be paved first, but what I think is happening is that a private sector developer buys a specific area and builds both houses and roads there.  Then it is the government’s responsibility to sort out connecting roads, and well, the Ivorian government hasn’t been very good at that over the last ten years.

Paving roads should be in a government’s interest though, it not only makes life easier for citizens and reduces transport costs for the private sector, but is also apparently a key factor in people’s perception of government. Here are results from a Mexican study I found via chrisblattman.com:

Families living along streets that were treated with pavement were 0.304 points more satisfied with the local government than those in the control group (on a 4-point scale).

Satisfaction with the State and Federal government also increased significantly, by 0.168 and 0.140 points. In other words, the direct effect of the local policy is about twice as large as the indirect effects.

…the indirect effect does not occur along party lines, but reflects a generalized improved perception for all other branches of government.

Finally… the return for the implementing politician in terms of vote share is 7 percentage points (20% increase in share) if an unpaved electoral section gets fully paved under the politician’s watch.

My Cocody house is actually in a paved road island area.  I was going there with some prospective tenants on a rough unpaved road and they asked if there was any other way to reach the house.  I had to tell them that yes, there are other paths, but unfortunately they aren’t paved either.

Building roads and bridges

On the other hand, the good news is that the Ouattara government is doing progress in paving and building roads. And when roads get paved real estate values increase.

An unpaved road in central Abidjan with a road-building machine on it

The worst thing with unpaved roads is when there are heavy rains – and that’s a frequent occurrence in Abidjan. Roads then often become impassable or force speeds  to be reduced to crawling, virtually shutting down whole sections of the city. Here’s how it looks, same street as above:

4x4s sell rather well in Abidjan

Speaking of infrastructure, I recently saw a video of the planned construction of the so called 3rd bridge of Abidjan crossing the lagoon, and the connecting highway ramp/roundabout at Riviera II.  I hadn’t quite realised how long the bridge would be – 2 km, and over three times the length of any of the existing bridges.   The thing with the bridge project is that it was planned something like 15 years ago, but then nothing happened.  One of Gbagbo’s aides even built a house on the mouth of the bridge. Now the house has to be demolished and there is a bit of of brouhaha over that.

Anyhow, here’s the video:

Posted by: Martin | January 9, 2012

Sensing a new trend

Oui, on va rentrer

In the last six months when talking to Ivorians and Africans in general living in Europe, it seems like everybody is seriously planning on returning to Africa for good.  Two or three years ago I didn’t at all hear the same talk, so it looks like a new trend.

And it makes a lot of sense with a stagnating (at best) European economy and many African economies doing better than at any time since independence.  Also, if you are reasonably well off, there are plenty of business opportunities as well as advantages in terms of lifestyle (weather, childcare, affordability of maids etc) when living in Africa. On top of that I think issues such as hidden xenophobia and a sense of feeling snubbed contribute to incentives to moving to Africa.

What’s surprised me recently is hearing several Ivorians living in Europe for over 10 years, with good jobs, children growing up in Europe, and European passports, having moved to Abidjan or saying they are planning a permanent move. One said he was happy to switch from going up early to go to work in the cold and rain, to having his own business and own office in Abidjan.

Temporary Migration

All of this doesn’t mean less people will want to emigrate out of Africa though.  With Africa getting wealthier, I believe emigration will actually increase as the effect of more people having the means to emigrate is greater than the effect of increased number of people wealthy enough not to have economic incentives to emigrate.  Difference in average living standards between a growing Africa and a stagnating developed world will still be large enough to push migration for quite some time. (Though more Africans may choose to go to Asia instead of Europe in the future.)

What’s happening is that migration is temporary and circular. Philippe Legrain explains it well in an Economist article entitled Moving out, on and back:

“Circular” migration, in which people come and go between destinations, is on the rise, as is “on-migration”, where a migrant moves first from China to Canada, say, and then on to America. OECD researchers reckon that at least 19% of migrants who arrived in America at the turn of the millennium had left for other destinations five years later. On-migration is also common among migrants from Africa and Asia. Europeans, for their part, tend to live abroad for only a limited time.

“The notion that migration is a one-way movement of permanent settlement is outdated. Most of it is temporary—and it’s time the debate about immigration recognised this reality,” argues Philippe Legrain, an analyst of immigration and the author of “Aftershock”, a recent book analysing economic changes in the wake of the financial crash.

Far from disappearing in the wake of the crash, Ms Sumption says, migration is still “a sensible long-term investment for many people.” Although hard times may change migrants’ destinations, they do not sap the will to move in search of a better life. This is good news: migrants did not contribute to the economic crisis, and they may yet help to overcome it.

Posted by: Martin | January 8, 2012

Catching the Entrepreneurship bug

Last Friday I got several month’s advance rent plus deposit from the new tenant moving in to the Cocody house. It’s the best single day positive cashflow since I started the business, and quite a great feeling – very different from receiving a salary.

I think it’s because the cashflow comes from pursuing one’s own independent idea/dream and building something from scratch, instead contributing to someone else’s agenda. It’s kind of like a waking up moment, seeing that it’s possible to opt out from a day-job at a big company and a life with terms to a great extent dictated by someone else,  and that opportunities and possibilities are pretty great.

Guess I’ve caught the entrepreneurship bug or something. As usual Steve Jobs expresses the whole thing very well, this time in a 46 second long video:

 

When you grow up you tend to get told the world is the way it is and you’re life is just to live your life inside the world. Try not to bash into the walls too much. Try to have a nice family, have fun, save a little money.

That’s a very limited life. Life can be much broader once you discover one simple fact: Everything around you that you call life was made up by people that were no smarter than you and you can change it, you can influence it, you can build your own things that other people can use.

Once you learn that, you’ll never be the same again.

A typical release is planned many months in advance,  and regrettably, your planet is one of those scheduled for demolition

On the online banking website of the bank where Im a customer, you can send money to Burkina Faso, Togo and even to “US Minor Outlaying Islands” which according to Wikipedia have no permanent residents. However, you cannot send money to the Ivory Coast.

In March 2010 I asked them about it and got the following answer:

Apologies for the delay in coming back to you on your query. I have investigated this with our International Payments area and have been advised that currently there are EU and US sanction in place against Ivory Coast. Until such time as these sanctions are relaxed there will be no option to make a payment to this country using Internet Banking.

Since the sanctions are gone, but the Ivory Coast is still not on the drop down menu for international payments I emailed them last week and got the following response:

Dear Martin,

Thank you for your email. I acknowledge that currently the Internet Banking website does not offer the International Payment facility to the Ivory Coast.

I assure you that we endeavour to meet the needs of our customers and continually benchmark our product offering against our competitors. We operate a scheduled release system for updating Internet Banking. A typical release is planned many months in advance, unfortunately our current release schedule does not include the addition of the Ivory Coast for International Payments.

However, thank you for your feedback. We have taken note of  your suggestion and will submit it for inclusion in our future Release Plans.

Yup, that’s a lovely bureaucratic answer. My local bank is clearly not owned by Richard Branson, and  I can start seeing where Douglas Adams got inspiration for the Vogons in the Hitch Hiker’s Guide to the Galaxy:

People of Earth, your attention, please. This is Prostetnic Vogon Jeltz of the Galactic Hyperspace Planning Council. As you will no doubt be aware, the plans for development of the outlying regions of the Galaxy require the building of a hyperspatial express route through your star system. And regrettably, your planet is one of those scheduled for demolition. The process will take slightly less than two of your Earth minutes. Thank you.

There’s no point in acting surprised about it. All the planning charts and demolition orders have been on display at your local planning department in Alpha Centauri for 50 of your Earth years, so you’ve had plenty of time to lodge any formal complaint and it’s far too late to start making a fuss about it now. … What do you mean you’ve never been to Alpha Centauri? Oh, for heaven’s sake, mankind, it’s only four light years away, you know. I’m sorry, but if you can’t be bothered to take an interest in local affairs, that’s your own lookout. Energize the demolition beams.

Posted by: Martin | January 2, 2012

The Maverick in Me

Richard Branson

Other holiday reading I’ve been doing is Richard Branson’s autobiography “Losing my Virginity”.   I had lots of “yes exactly!!” moments while reading it, and a few “ok, he is crazy” moments, but overall it’s a very inspiring entrepreneurship tale with lots of things that resonated with me in Bransons way of conducting business and outlook on life.   Just makes me wish I had started my business venture much earlier.

Things I liked:

  • The emphasis on curiosity, adventure and having fun in business (and in life).  When working on my business, it really doesn’t feel like work at all – I enjoy it too much.  I think it was the same for Branson from the very start, just that he has done it full time his whole life, and for me it’s (so far) just a side-activity to my day-job.
    As for curiosity, here’s an excerpt from the Sense of Wonder post:

One of the things that I find exciting about West Africa and the Ivory Coast – is that it’s so different from everything one can experience living in Europe (or most of the rest of the world). It kind of naturally spurs a curiosity to figure out how the place works. Setting up a business is turning out to be a pretty good way of channeling that curiosity and exploring how things work. And it should work the other way too, that  curiosity – if it can be kept up – should be good for the business (and far from only for the business).

  • Keeping things relatively informal with minimal bureaucracy and hierarchy. When things get too big Branson says he takes the deputy managers and promotes them to be in charge of a new company.  This way the Virgin group has 415 companies, and I have well… 3 very small ones: Real Estate, Taxis and Chicken Farm which are managed entirely independently.  Doing business in Africa has its issues, but one advantage is that the tax code, rules and regulations are kept relatively simple, making it easier to keep things informal and reducing bureaucracy.
  • The screw it, let’s do it – attitude.
  • “Maverickness”, not taking much notice of conventional wisdom and the way things are supposed to be done.

From the book:

Fun

First and foremost, any business proposal has to sound fun. If there is a market that is just served by two giant corporations, it appears to me there’s room for some healthy competition. As well as having fun, I love stirring the pot. I love giving big companies a run for their money – especially if they’re offering expensive poor-quality products.

“The maverick in me was also quietly amused that the guy who brought you The Sex Pistols could sort out your pension, too.”  – Branson, upon setting up Virgin Money

Love this quote.  Setting up a chicken farm in the Ivory Coast is quite a maverick thing to do for a full time employed engineer from Sweden I guess, but as maverickness goes, I see the bar has been raised.

Informal and restless

Virgin Money may appear to have been an incongruous departure for Virgin, the rock’n’roll company: it was a lateral leap in the same way as it had been from records to an airline.  But it was still all about service, value for money and offering a simple product.  The vision I have for Virgin does not run along the orthodox lines of building up a company with a vast  head office and a pyramid of command from a central board of directors. I am not saying that such a structure is wrong – far from it. It makes for formidable companies from Coca-Cola to Pearson to Microsoft. It is just that my mind doesn’t work like that. I am too informal and restless, and I like to move on.

Curiosity and Adventure

I have always lived my life thriving on opportunity and adventure. Some of the best ideas come out of the blue, and you have to keep an open mind to see their virtue. Just as an American lawyer called me to set up an airline in 1984, a Swedish ballooning fanatic asked me to fly over the Atlantic with him in 1987. The proposals come thick and fast and I have no idea what the next will be. I do, however, know that, if I listen carefully enough, the good ideas somehow all fit into the framework that Virgin has become. By nature I am curious about life, and this extends to my business. That curiosity has led me down many unexpected paths and introduced me to many extraordinary people. Virgin is a collection of such people and its success rests on them.

Embrace Change

If there’s a good business plan, limited downside, good people and a good product, we’ll go for it. In some ways it all boils down to convention. As you may have noticed, I do not set much store by such so-called wisdom. Conventionally, you concentrate on what you are doing and never stray beyond fairly narrow boundaries when running a company. Not only do I find that restrictive, but I also think that it’s dangerous. If you only run record shops and refuse to embrace change, when something new like the Internet or MP3 is launched you will lose your sales to the person who makes use of the new medium.

When we established as a mail-order record company, and thus dependent on the post, out of the blue came a six-month postal strike. If we hadn’t reinvented ourselves, we would have gone bust. There was no choice. Within days of the strike we had opened our first Virgin Records shop. It may have been up a dark, narrow flight of stairs above a shoe shop and have consisted merely of some shelves, a shabby sofa and a till, but in its own small way it taught us all we know about retailing. I can draw a straight line from that tiny shop to the Virgin Megastores in London, Paris and New York. It’s just a matter of scale, but first you have to believe you can make it happen.

No retiring

At this point [after selling Virgin Records and having £500 million in the bank] I could of course have retired and concentrated my energies on learning how to paint watercolours or how to beat my mum at golf. It wasn’t, and still isn’t, in my nature to do so. People asked me, “Why don’t you have some fun now?” but they were missing the point. As far as I was concerned, this was fun. Fun is the core of the way I like to do business and it has been key to everything I’ve done from the outset. More than any other element, fun is the secret of Virgin’s success.

You have to be out there

Even though I’m often asked to define my “business philosophy”, I generally won’t do so, because I don’t believe it can be taught as it was a recipe. There aren’t ingredients and techniques that will guarantee success. Parameters exist that, if followed, will ensure a business can continue, but you cannot clearly define our business success and then bottle it as you would a perfume. It’s not that simple: to be successful, you have to be out there, you have to hit the ground running; and, if you have a good team around you and more than your fair share of luck, you might make something happen. But you certainly can’t guarantee it just by following someone else’s formula.

Business is a fluid, changing substance, and, as far as I’m concerned, the group will never stand still.

Posted by: Martin | January 1, 2012

Encouraging signs

Preliminary performance check

In the The ball is in your camp President Ouattara! post published the 11 April 2011 I outlined my expectations for the new government. The last point was an improvement for the Ivory Coast in international rankings of governance, produced by the likes of Transparency International, Freedom House and Heritage Foundation.

These rankings are probably the easiest way to gauge how the Ivorian government is doing, but they are a lagging indicator and I don’t think any of them have yet been published for a time period after Gbagbo’s fall.

So to check the Ouattara government performance – principally that they are not too corrupt – one has to look at datapoints here and there from what they have actually done.  So, here are a few encouraging things I’ve seen so far:

  • Infrastructure projects: A surprising amount has actually been achieved, roads have been built and paved, potholes fixed, new bridges built, construction started on a few big projects. And this is a very good indicator. With high corruption it’s difficult to get much done, because everything will cost a lot more, and result in infighting about who gets which bribe. Then there is the not so uncommon case where nothing gets done and all the money ends up in the pockets of the responsible politicians.

Opening ceremony for a bridge in Cocody

  • This is anecdotal evidence, but I’ve heard that a top level employee of a large international organisation, upon arriving to the Ivory Coast, said he’d never seen an African government work this hard.
  • Reduction of staff at the national television RTI and Air Ivoire, both badly run overstaffed companies where hiring had been far from meritocratic.
  • Reduction of checkpoints to officially 33 nationally. There are still illegal checkpoints, but at least in Abidjan the situation is better than in many years.
  • In the budget for 2012 there are more funds put aside for investments than in the last 3 to 4 decades (according to the responsible minister – haven’t checked myself)

In European media, when you hear about the Ivory Coast, beside Gbagbo going to the Hague, it’s usually about the limited bouts of violence that have happened.  I kind of think that stuff like the above is more significant and more important for the future.

Stealing It

Stories like the above are essentially about corruption, or how people with power use it to steal wealth produced by others – which has been a natural state of affairs in human history –  and how/if actions, institutions and structures are put in place to reduce it.

In Paul Graham’s book Hackers and Painters there is a chapter called Stealing It which is quite illuminating about corruption:

In conflicts, those on the winning side would receive the estates confiscated from the losers. In England in the 1060s, when William the Conqueror distributed the estates of the defeated Anglo-Saxon nobles to his followers, the conflict was military. By the 1530s, when Henry VIII distributed the estates of the monasteries to his followers, it was mostly political. But the principle was the same. Indeed, the same principle is at work now in Zimbabwe.

In more organized societies, like China, the ruler and his officials used taxation instead of confiscation. But here too we see the same principle: the way to get rich was not to create wealth, but to serve a ruler powerful enough to appropriate it.

This started to change in Europe with the rise of the middle class. Now we think of the middle class as people who are neither rich nor poor, but originally they were a distinct group. In a feudal society, there are just two classes: a warrior aristocracy, and the serfs who work their estates. The middle class were a new, third group who lived in towns and supported themselves by manufactoring and trade.

Starting in the tenth and eleventh centuries, petty nobles and former serfs banded together in towns that gradually became powerful enough to ignore the local feudal lords. Like serfs, the middle class made a living largely by creating wealth. (In port cities like Genoa and Pisa they also engaged in piracy). But unlike serfs they had an incentive to create a lot of it. Any wealth a serf created belonged to his master. There was not much point in making more than you could hide. Whereas the independence of townsmen allowed them to keep whatever wealth they created.

Once it became possible to get rich by creating wealth society as a whole started to get rich very rapidly. Nearly everything we have was created by the middle class. Indeed, the other two classes have effectively disappeared in industrial societies, and their names have been given to either end of the middle class. (In the original sense of the word, Bill Gates is middle class.)

But it was not till the Industrial Revolution that wealth creation definetly replaced corruption as the best way to get rich. In England, at least, corruption only became unfashionable (and in fact only started to be called “corruption”) when there started to be other, faster ways to get rich.

Seventeenth century England was much like the third world today, in that government office was a recognised route to wealth. The great fortunes of that time were still derived more from what we now call corruption than from commerce. By the nineteenth century that had changed. There continued to be bribes, as thee are still everywhere, but politics had been left to men who were driven more by vanity than by greed.

Posted by: Martin | December 27, 2011

Questions Batch 3

It’s been a while since last time, but I used to collect unanswered questions that have come up in past blogposts. Here is a new batch:

(1) This one is from drogbascountry:

Many people in the large middle class area of Cocody, as elsewhere, own homes that are worth a lot of money, and the roads are filled with large expensive saloon cars and 4×4. […] you often see finer cars than you see in Paris, clubs where champagne is drunk like orange juice and vast mansions in Cocody?

So where does the money come from?

I tried to answer in the comments, but I think there’s more to say on this one.

(2) In the post about Customs I found a graph of US government spending from 1870. One of the expenditure categories was “Indians”.  I have a feeling this spending didn’t do the Indians much good, probably quite the opposite, but what was it?

Silly Walks was only in the planning stage in 1870

(3) Why are there so few apartments for sale in Abidjan, and instead whole buildings are for sale?  Mentioned in the Abidjan Real Estate post.

(4) How is the GDP for the Ivory Coast put together?  What are the various components? / what assumptions are made? / how is the informal sector treated?    I have no idea, but I’d really like to know, and it should be possible to figure out.

(5) How would the Ivory Coast be affected by a break-up of the Eurozone?  This one might be impossible to know for sure, but it’s a good topic for speculations.

Posted by: Martin | December 26, 2011

Letting Entrepreneurs Create Wealth

Hackers and Painters

I’m currently immersed in a book I got for Christmas, Hackers and Painters – Big Ideas from the Computer Age by Paul Graham. It’s in parts absolutely brilliant and, even better, I think I can connect it to the Ivory Coast without too much of a stretch.

From the chapter “How to make Wealth”:

Making wealth is not the only way to get rich. For most of human history it has not even been the most common. Until a few centuries ago, the main sources of wealth were mines, slaves and serfs, land and cattle, and the only ways to acquire these rapidly were by inheritance, marriage, conquest, or confiscation. Naturally wealth had a bad reputation.

Two things changed. The first was the rule of law. For most of the world’s history, if you did somehow accumulate a fortune, the ruler or his henchmen would find a way to steal it. But in medieval Europe something new happened. A new class of merchants and manufacturers began to collect in towns. Together they were able to withstand the feudal lord. So for the first time in history, the bullies stopped stealing the nerds’ lunch money. This was naturally a great incentive, and possibly indeed the main cause of the second big change, industrialization.

A great deal has been written about the causes of the industrial revolution. But surely a necessary, if not sufficient, condition was that people who made fortunes be able to enjoy them in peace. One piece of evidence is what happened to countries that tried to return to the old model, like the Soviet Union, and to a lesser extent Britain under the labour governments of the 1960s and early 1970s. Take away the incentive to wealth, and technical innovation grinds to a halt.

Encouraging signs and trends for Africa and the Ivory Coast

Both in pre- and postcolonial times, as an African, if you set up a successful enterprise of any kind, you would be likely to run into the ruler or his henchmen (colonial ruler / homegrown dictator depending on the era) sooner or later.  For a very long time incentives to create wealth in most of Africa have been quite lousy – warriors and politicians regularly squashed entrepreneurs. However, looking at Freedom House scores, the World Bank’s Doing Business survey and other places, it seems that there has been a positive trend since the early 90s that has also resulted in higher growth figures.

In the Ivory Coast, it’s still early days for the Ouattara government, but there are plenty of encouraging signs that the government and the public administration in general, are strengthening the rule of law, and to a lesser extent than before use their power to put wealth created by ordinary Ivorians into their own pockets.

As to risks of things getting worse, I do not think the main problem is Gbagbo’s supporters coming back to power. That would indeed be bad, but I don’t think they can. They don’t have enough support to win a democratic election, even if they were united which they are not.  I think Gbagbo’s figures in the 2010 elections were augmented by his party controlling the state, but even then it wasn’t enough.

As to taking power through a military coup, many exiled Gbagbo supporters certainly would like to, but I don’t think they have the necessary resources or a neighbouring country prepared to offer military support.

Instead my main worry is that Ouattara’s government is behaving itself not because of a strong and independent media (Ivorian media isn’t), not because of strong institutions, civil society, or pressure from the Ivorian people, but because the person of Alassane Ouattara.   Ouattara is turning 70 years soon, and is not going to be there forever.  Hopefully when Ouattara eventually steps down,  institutions and checks and balances have strengthened so that things will work out even if the next guy isn’t as great.  Wealth created by entrepreneurs should contribute to increasing the size of the middle class which in turn is great for strengthening the civil society and democratic institutions. It’s tough being a dictator in a country with a large middle class.

Letting the nerds keep their lunch money

Back to Paul Graham, here’s the follow up on the text above:

Startups are not just something that happened in Silicon Valley in the last couple decades. Since it became possible to get rich by creating wealth, everyone who has done it has used essentially the same recipe: measurement and leverage, where measurement comes from working with a small group, and leverage from developing new techniques. The recipe was the same in Florence in 1200 as it is in Santa Clara today.

Understanding this may help to answer an important question: why Europe grew so powerful. Was it something about the geography of Europe? Was it that Europeans are somehow superior? Was it their religion? The answer (or at least the proximate cause) may be that the Europeans rode on the crest of a powerful new idea: allowing those who made a lot of money keep it.

Once you are allowed to do that, people who want to get rich can do it by generating wealth instead of stealing it. The resulting technological growth translates not only into wealth but into military power. The theory that led to the stealth plane was developed by a Soviet mathematician. But because the Soviet Union didn’t have a computer industry, it remained for them a theory; they didn’t have hardware capable of executing the calculations fast enough to design an actual airplane.

In that respect the Cold War teaches the same lesson as World War II, and for that matter, most wars in recent history. Don’t let a ruling class of warriors and politicians squash the entrepreneurs. The same recipe that makes individuals rich makes countries powerful. Let the nerds keep their lunch money, and you rule the world.

Click to get to a chapter of the book in pdf

Posted by: Martin | December 18, 2011

Ivory Coast online – New Sweep

Popular sites

Time for a new sweep on what’s happening online in the Ivory Coast. Here are the most viewed sites by internet users in the Ivory Coast according to Alexa:

1. Facebook.com (+2) [Global rank: 2]

2. Google.ci (-) [Global rank: 4,010]

3. Yahoo.com (-2) [Global rank: 4]

4. Abidjan.net (+2) [Global rank: 6,556]

5. Youtube.com (+3) [Global rank: 3]

6. Google.com (+3) [Global rank: 1]

7. Google.fr (+2) [Global rank: 25]

8. Live.com (-4) [Global rank: 8]

9. Msn.com (-2) [Global rank: 12]

10. Wikipedia.org (new) [Global rank: 6]

Numbers in parenthesis are changes compared to my last Ivory Coast online check in March 2010. No dramatic changes in other words, with Abidjan.net keeping its position as the by far most viewed Ivory Coast-specific site. It makes sense, it’s a great site, and I check it out daily to get my Ivory Coast fix.

Here’s Abidjan.net traffic rank over the last two years clearly showing an increased interest during the Ivorian crisis:

Beyond the top 10

Beyond the top 10 I find the following interesting/locally produced sites:

12. afrik11.com [Global rank: 35,395] – A site about African football seemingly based in the Ivory Coast as 90% of its traffic comes from the Ivory Coast.

14. Atoo.ci [Global rank: 46,419]  – A portal for all things Ivory Coast just like Abidjan.net just not as popular

15. educarriere.ci [Global rank: 51,883] – A relatively new Ivorian site for jobs and education, that also has an active dating section (which might be the secret behind its prominent ranking)

20. Gbich.com [Global rank: 51,883] – The site of the Ivorian humoristic newspaper Gbich!

24. GoMagazine.ci [Global rank: 88,463] – The site of Go Magazine, Ivory Coast’s response to Cosmopolitan

25. rfi.fr [Global rank: 5,205] – Radio France Internationale

26. cnseci.com [Global rank: 206,752] –  Support site for the Ivorian national football team

27. twitter.com [Global rank: 9]

29. JeuneAfrique.com [Global rank: 16,700]

38. Deco.ci [Global rank: 164,185] – The Ivorian Ministry of Education’s site for exams

47. leBanco.net [Global rank: 169,215] – Ivorian news and politics site

49. youporn.com [Global rank: 86] – Would have thought porn sites would have higher ranking internationally than in the Ivory Coast, not because of ivorians being more puritan than elsewhere but because of the use of internet cafes – but apparently not.

51. gouv.ci – The official portal of the Ivorian government

60. ivoire-blog.com – Blogsite, Ivory Coast’s blogspot

61. Ivoirbusiness.com – Yet another Ivorian news/politics site, this time with a pro-Gbagbo bias

62. Ivoirmixdj.com – A site for DJ:s and music lovers

76 Abidjanshow.com – Promoting concerts and show business events in Abidjan

87. Onuci.org – United Nations Operations in the ivory Coast

96. ChelseaFC.com – Chelsea Football Club

109. thepiratebay.org – The Pirate Bay, and the first Swedish-built site on this list

145. FratMat.info – The highest ranked mainstream Ivorian newspaper

What are Ivorians interested in?

Something has clearly happened since I last checked Alexa rankings. Tech sites are less prominent, sites created in the Ivory Coast (or rather Abidjan) for the Ivory Coast are more prominent, and one can actually start using Alexa rankings to get an idea of what Ivorians are interested in.  And that would be social networking, news, celebrity gossip, football, dating, music, porn, exam results, more football, humour, education and jobs. Pretty much like in the rest of the world.

I checked Swedish Alexa rakings and we got the same thing, but with a little less football and more e-commerce sites and online banking (and more porn). And with tabloid Aftonbladet.se replacing Abidjan.net as the only local site among the top 10, which is quite a trade-down.

As for e-commerce, the whole buying stuff online and getting it shipped model is practically non-existent in the Ivory Coast (for multiple mainly non-tech related reasons).  Online ads for all sorts of stuff exist though, and it’s handled by the portal sites, so it’s a bit like the 1999 vision of the internet coming true.  Abidjan.net is among other things the craigslist of the Ivory Coast, but I doubt it will also be the ebay, amazon and match.com of the Ivory Coast, so there should be a business opportunity for these services sooner or later.

Posted by: Martin | December 17, 2011

Being real about setbacks

Lessons from James Altucher

One of my favourite blogs is James Altucher’s. In a recent post he writes about what he has learned from poker. Now, I don’t care much about poker, but  Altucher practically always has something interesting to say:

D) Poker is a skill game pretending to be a chance game. Many things in life are like that: sales, negotiating, entrepreneurship, etc. All of these things have the element of chance in them but the ones who are skillful will take all the money from the ones who aren’t. The problem is: most people think they are good because it’s hard to rank yourself and many people go into denial when they lose money. They tell people, “oh, I broke even” when they lost money most of the night. How do you get better at any skill game:

  • study and think about your mistakes. Don’t regret your mistakes. You’ll always make mistakes. The better you are, the less mistakes you make. The only way to get better is to thoroughly analyze your mistakes. So the more mistakes you have, the more opportunities you have to get better. Of course, this applies to everything you do in life.
  • – talk to people smarter than you. Try to learn from them anything you can.

Acknowledging mistakes

Looking at my investments in the Ivory Coast I have indeed made lots of mistakes and had setbacks. I quite agree with Altucher’s approach of not regretting, but acknowledging and analyzing mistakes, and being real about setbacks as opposed to pretending to break even.

So, here are mistakes I’ve made in the last year:

  • Not checking the equipment (like triangle and stuff) of the car before sending it to Abidjan to become a taxi.
  • Getting the wrong person to manage the works on the Cocody house.  He was perfectly honest, but somewhat out of his depth managing the project. Guess I focused too much on integrity and not enough on competence. The real estate agency that’s in charge of letting the house took over the managers role and finished the works without hiccups.
  • Not insisting enough on keeping advances small and not giving last chances to the carpenter who took money and never finished his work. A combination not being there in person, having the wrong manager, and following a law firm’s advice instead of my gut feeling, is to blame here I believe.
  • Not acting early enough when rents go unpaid.  I haven’t written about the Yopougon apartments in a while, but after the crisis I’ve had a few problems with non-paying tenants and am in the process of replacing them.

None of the above has caused any material monetary setback.  The one material setback I have had since starting investing in the Ivory Coast, was when the two shops I had in connection with the Cocody house were looted and destroyed in a fire.  I learned about it at the same time as Gbagbo’s fall, so the bad news were overshadowed by much greater good news reducing the psychological impact.

Still, the shops always paid their rent on time with no hassle, so it  sucks to have lost them. The rents I collected during the 10 months or so the shops were in operation do not cover the building costs, so it’s a definite loss, no other way around it.  Here’s what’s left of one of the shops:

Quotes

And since I’m a sucker for insightful/inspirational quotes from dead (or sometimes alive, but mostly dead) people, here are a few of those:

“Don’t fear failure so much that you refuse to try new things. The saddest summary of a life contains three descriptions: could have, might have, and should have.”
— Louis E. Boone

“I don’t know the key to success, but the key to failure is trying to please everybody.”
— Bill Cosby

“The majority of people meet with failure because they lack the persistence to create new plans to take the place of failed plans.”
— Mark Victor Hansen

“A man can fail many times, but he isn’t a failure until he begins to blame somebody else.”
— John Burroughs

“Ninety-nine percent of all failures come from people who have a habit of making excuses.”
— George Washington Carver (American Botanist and Chemist 1864 – 1943)

“Ever tried? Ever failed? No matter. Try Again. Fail again. Fail better.”
— Samuel Beckett, playwright and novelist

“Many are stubborn in pursuit of the path they have chosen, few in pursuit of the goal.”
— Friedrich Nietzsche

“Our greatest glory is not in never failing, but in rising up every time we fail.”
— Ralph Waldo Emerson

“Take the risk of thinking for yourself, much more happiness, truth, beauty, and wisdom will come to you that way.”
— Christopher Hitchens (sadly among the dead ones)

“If at first you don’t succeed, try, try again. Then quit. No use being a damn fool about it.”
— W.C. Fields

Posted by: Martin | December 11, 2011

Under Construction

The chicken farm is now in full construction. Here are a few photos:

[And, yes, I am aware there are parliamentary elections under way in the Ivory Coast. There’s not at all of the same nerve or importance  as the presidential elections last year, but it will be interesting to see what the final turnout amounts to (might well be higher than the 33.1% of 2000)  and the split between RDR, PDCI and others. ]

 

Posted by: Martin | December 4, 2011

Naysayers tentatively proven wrong

Still failing to find the catch

When starting out with the taxi project I thought the budgeted numbers looked too good to be true and wondered where the catch was.

Now I have three month of data and it looks like naysayers are (tentatively) proven wrong, as I’ve not encountered any show-stopping catch.  The only major surprise to the downside was custom costs at Abidjan port to bring in the car turning out to be more than twice the budgeted figure. Even with that, the projected internal rate of return for the taxi investment, with a conservative estimate of the taxi running for only two years, and having no residual value at the two year point, is still a fantastic 65%.

Having naysayers (or dream killers as Ismael Coulibaly calls them) can actually be pretty good for one’s motivation. It jolts you out of complacency, makes you take a careful look at the downside, and spurs you to put in extra effort to prove them wrong. For the chicken farming project I have so far only gotten positive response. I’m almost wishing someone comes along and says it’s never going to work / it can’t be done / they have never seen anyone make any money out of a chicken breeding /that I’m going to lose all the invested money.

How long will it last?

With the taxi I have actually had a surprise to the upside as well; the repair and service costs have been much lower than expected. The car bought originally for 450€ was in pretty bad shape, and it’s been patched up progressively during its first months of running in Abidjan without any significant impact on the profits.  The thing is, everybody in the taxi business are using Toyotas and especially Toyota Corollas, so spare parts can be found in abundance keeping costs low.  And as always in the Ivory Coast labour costs are low.

Given that the taxi is continuously serviced and repaired, I’m starting to hope/think that it can last more than two years. Beside avoiding accidents, I guess it’s up to the Toyota engine and well, here I trust that the Japanese know what they are doing.  If it lasts three years the internal rate of return jumps up to 90%, and for four years, it’s above 100%.

Ok, sometimes the Japanese don't know what they are doing

Posted by: Martin | December 3, 2011

Gbagbo at the ICC

Bloody Marvellous

A few days ago Ivory Coast’s former president/dictator Laurent Gbagbo was sent from his house arrest in the northern ivorian city of Korhogo to the International Criminal Court in the Hague.

For a very long time – almost a decade – having Gbagbo  tried at the ICC for crimes against humanity seemed a distant and unlikely best-case scenario. Kind of have to pinch myself to be sure that this is really happening. Anyhow, it is – to use a great british expression – bloody marvellous, and it’s going to be interesting to follow the trial.

Non-stop Korhogo - The Hague

This is personal

I’ve never met Gbagbo myself, but I’ve had a less pleasant encounter with elements of his army and a quasi encounter with his death squads, so unlike – well, all other criminal trials – I have some sort of personal connection to this one.

Back in 2003 I went to a remembrance ceremony for the Yopougon massacre in 2000 at the Williamsville cemetary in Abidjan. And yes, I did some crazy stuff back then – I hope I haven’t stopped!  Here’s the story of the Yopougon massacre told by Belgian sociologist Benoit Scheuer:

[…] The result was a general climate of discrimination against people who were not “pure Ivorians”. Half the country was stripped of its moral dignity. Policemen would take the identity cards of citizens who were not “sufficiently Ivorian” and tear them up in front of them, in the middle of the street. Then they would tell them, “So you think you’re an Ivorian? Now try and prove it!”

This verbal and moral onslaught inevitably turned to physical violence. The first act of the tragedy came in October 2000, when the police at Yopougon in the suburbs of Abidjan rounded up 59 ethnic Dioulas. Two of them escaped; the rest were shot dead in cold blood.

The Yopougon massacre was not an isolated incident, a mistake, a moment of collective madness: it was part of a deliberate strategy of terror orchestrated by the state. The murderers could easily have hidden the bodies. But instead, just as the Serbian militias did in ex-Yugoslavia, they left them on display, turning their deaths into theatre. The aim was to instil fear into people. The corpses were meant as a message to all northerners: “You should get out of here, because if you don’t, this is what will happen to you!”

In October 2003 it was a group of about 200 persons, mainly northerners, who gathered at the cemetery where those killed  in the Yopougon massacre rested. The event was a combination of a religious ceremony with both muslim and christian imams/priests present as well as a political statement by Ouattara’s RDR party who had sent quite a few people.

At the start of the ceremony 30 or so soldiers from the regular army loyal to Gbagbo showed up and positioned themselves 150 meters away from us.  Then 20 minutes into the ceremony we heard loud gunshots. It turned out it was the soldiers firing in the air above us as intimidation.  The ceremony kept going as if nothing happened. The ivorians next to me said not to worry, that it  was always like this, but also indicated in which direction to run if the soldiers started to aim lower. Fortunately nothing happened, the ceremony ended, and we all went home. Read More…

Posted by: Martin | November 27, 2011

A photo for the grandchildren

This hi-rise building in the Plateau district is the most visible sign of the ivorian crisis I noticed in Abidjan.  The damage is from small arms fire in the beginning of April when the fighting reached very central Abidjan.

I’m thinking that it’s a photo to save for the grandchildren, that will hopefully look as surreal and remote to them as  World War II photos of Europe look to me.

Small arms fire - typically not great for real estate values

Read More…

Posted by: Martin | November 23, 2011

Taleb’s measure of success

Possible but not easy

“My only measure of success is how much time you have to kill,”

-Nicholas Nassim Taleb

I have heard it said that you either have to work at a regular job, or you can start your own business, but if you do that you have to work even longer hours.  So we are all trapped, and it’s tough to meet Taleb’s measure of success.

Im thinking that it would be cool to show that it’s possible to start one’s own business without spending very much time on it, and without being wealthy at the outset.  So far my business is still small, but it looks entirely possible to make it bigger without increasing the time spent on it much. The blog actually takes more time than the business, and I’ll try to keep it that way. Ultimately it’s about a sense of freedom, of not being bogged down, and mastering one’s own time.

So, I think it’s possible to set up a business without spending too much time on it, but it’s hardly easy.   In my case I’m trying to manage things in Africa from Europe and that means you got to have people you can rely on to handle things on site. I think I do, but there are still snags.

Recently, I have had a carpenter  supposed to do work on the Cocody house taking an advance of 135,000 CFA Francs (205 euro), but not doing any work.  He has admitted he took the money to pay debts, and I got another carpenter to finish the job, but I’m not sure I’ll ever see those 135,000 CFA Francs again.  The law firm that I’m working with are pretty optimistic though. They say at worst they’ll get the carpenter put in jail and then his relatives will collect the money.  Well, I’ll see. It’ll be a test of the Ivorian legal system and how things work in practice.

Pas trop de frime

The other part of it not being easy to set up a business without spending much time on it, is that it means living beneath one’s means for a long period of time.  I’m taking a big chunk of my discretionary spending and investing it in the Ivory Coast, instead of well, spending it.

Guess it would have been possible to go down the debt route instead, but that isn’t really my style.  I mean sooner or later I will probably take on some reasonable amount of debt to expand the business, and there’s nothing wrong in principle with debt financing. What I mean is pretty well expressed by John Hempton at the Bronte Capital blog:

Chapter Two however starts with one of the best quotes I have ever seen:

“To be successful, keep looking tanned, live in an elegant building (even if you’re in the cellar), be seen in smart restaurants (even if you nurse one drink) and if you borrow, borrow big.” 

-Aristotle Onassis

Seldom have I seen a business/political philosophy so diametrically opposed to mine stated so clearly. And exemplars abound – think Angelo Mozilo in American finance or Andrew Peacock in Australian politics.

Just a fabulous quote and a world view that seems to work for the people who hold it if not for the rest of us…

Posted by: Martin | November 21, 2011

Brace for Impact!

Crunch Time

It’s looking like the debt situation in Western Europe is approaching crunch time. Regardless what governments do I just don’t see how they can meet the expectations of their peoples in terms of stuff like goods and services, public sector jobs, various benefits and allowances, or pensions.

The direct cause is debt spiraling out of control, and I’d say the fundamental causes for that are:

1) Demographics – an aging population

2) A welfare state that has been allowed to expand more than what could be afforded

3) Governments taking on bank debt instead of letting banks fail

Not all countries in Western Europe have messed up though, but all will be affected, and especially export-dependent ones like Sweden. In Sub-Saharan Africa I don’t think any country have the problems above, but the effects of the coming crisis will be felt there as well, but, I think, less severely than in Europe. I wrote about potential effects for the Ivory Coast in the Well, Western World that was a nice 500 year streak post.

As to what’s going to happen in Europe,  it’s a lot harder to predict than the Ivorian crisis, where it was quite entertaining and not always difficult to guess Gbagbo’s next moves.

The options for debt ridden European governments are:

(1) Austerity – to cut spending significantly which is politically difficult as it’s never popular. For Greece it’s probably too late, but the other countries could still do it.

(2) Raise taxes, but due to tax levels already being high it’s possible that money flight and reduced economic activity actually make tax revenue fall as taxes increase

(3) Redirect (or confiscate) available assets, like forcing publicly controlled pension funds to buy government bonds or influencing commercial banks to buy government bonds

(4) Getting Central Banks to print money to cover deficits – possible for non-eurozone countries, and pressure seems to be mounting on the ECB to do the same in one indirect way or another. But there are problems with printing to put it mildly.  Quoting a zerohedge article:

However, it [printing] leaves the current status quo and financial system intact, does not provide the much needed lesson on productive capital allocation, provides no incentive for governments to put in real structural reforms because of tighter credit conditions and it will only benefit debtors and not savers. Savers will be punished greatly, especially since there is no limit to printing currency and the central bank could carry on undisturbed for a long period of time. This will continue to ease the burden on debtors due to inflation, but looming hyperinflation will be devastating for everyone.

(5) Default on a big chunk of government debt. This risks causing a chain reaction default in the European (and global) financial system as many big banks would be bankrupt in case of a large sovereign default.

One conclusion seems to be that pensioners will get the short end of the stick as the value of pensions will be reduced in all scenarios (except (2) but raising taxes doesnt really solve the problem anyway). My guess is that we’ll get all of the above, and real questions are whether it will be an orderly retracement or not, and whether it will go down the default-deflation route or the printing-inflation route.

Brace for Impact

Either way, it seems to be time to brace for impact.  My main brace-for-impact strategy are the investments in the Ivory Coast – especially the chicken farm seems to be quite well suited for tougher times. Even if things were fine in Europe, I’d still have made the investments in the Ivory Coast though – but this situation increases the urgency a bit.

Other ideas to protect one’s assets could be to buy:

-Currencies of fiscally responsible countries that seem to be able to weather a storm better than others, like Norway, Singapore or Switzerland (betting they will not keep the peg, or that the euro will split up)

-Gold, silver or stocks in gold/silver mining companies. Not too great in a deflation-default scenario though.

-Stocks in solid companies producing stuff people need even in a severe downturn.

-Real assets, preferably incoming producing ones, and preferably in parts of the world less hit by a coming crisis – and well, here we are back with the investing in Africa theme.

-Or for the real doomsdayers guns and food, but I doubt it will be that bad.

Or get a job (or start a business) outside the developed world. There are still billions of people joining the middle class, and for the world as a whole I think there is reason for optimism and plenty of opportunities.

Posted by: Martin | November 20, 2011

Animals of Abidjan

Gotham City?

The Ivory Coast may not have much big game like other parts of Africa, but yet it happens that I’m in awe of the animal life just in Abidjan.

I’ve seen a few times when the sky over Abidjan is full of bats – thousands of them. No idea why, but it’s an impressive sight. Unfortunately, it’s very hard to capture on camera. Here are the attempts I made last time:

Read More…

Posted by: Martin | November 19, 2011

Abidjan Real Estate

Real Estate ads

I recently got a reader question about how much an apartment in the Plateau district of Abidjan would cost.  And I actually have no idea. One of the differences between the real estate market in Abidjan (plus I guess other major cities in West Africa) and Europe is that sales of individual apartments is relatively uncommon.  Instead, more often, whole multi-storey buildings bought and sold, and the owner of the whole building lets the individual apartments.

Here are real estate ads from Ivorian newspaper Nord-Sud as of 11/11/2011:

(Click to enlarge)

(click to enlarge)

Five billion, special price only for you my friend!

In Plateau we have

Plateau : 02 immeubles R+5 et R+8 RM : 52 millions à 5 milliards

This very small ad is for two buildings, ground floor + 5 storeys and + 8 storeys, sold together for 5 billion CFA Francs or 7.6 million euro, with a stated return of 52 million CFA Franc (79,300 euro) per month.

Not quite for the small scale investor in other words. Quite cool that a whole building is advertised in the same way as a used car though, and seems to be almost as easy to buy.  Unfortunately out of my league though.

On this whole page of real estate ads there are only two ads for individual apartments for sale, and none in Plateau.

Luxury villas

Another thing with these real estate ads is the dominance of luxury villas for rent. Examples:

Marcory résidentiel : (remblais) une villa duplex de 15 pièces haut standing meublée + piscine. Prix :8.000.000

II Plateaux 3ème tranche: villa duplex de 13 pièces haut standing neuf sur 1000m². Prix : 2.300.00

COCODY DANGA
Villa duplex 6P avec piscine – 1 500 000F/mois
Villa duplex 6P avec piscine – dépendance – 2 500 000F /moi

The top one is a two floor 15 room villa with swimming pool, in an upscale residential area for rent at a not-so-modest 8 million CFA per month ( 12,195 euro).

Guess  the luxury part of the market is where estate agencies make most commission.  Online, the top end segment is less dominant, but it’s still a big part of the market.  One reason is probably the income distribution with 0.5% or so super-rich, a far too small middle class, and all the rest.

In Europe luxury villas like these are more often bought than rented. In the Ivory Coast I guess you have executive level expats from the private sector, NGOs and the diplomatic world, that all require high standard living on a non-permanent basis.

I still kind of think that the prices are surprisingly high in Abidjan. I looked at rental prices for top end villas in Sweden and they are lower than in Abidjan. The whole developed world – developing world difference seems to break down in the top end segment.  Essentially, for 8 million CFA Franc per month  you can get anything you want in Sweden.

 

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