Hacker News new | past | comments | ask | show | jobs | submit login
Why are there so many unfinished buildings in Africa? (economist.com)
102 points by edward 7 days ago | hide | past | favorite | 168 comments





I have no idea if it is true, but, in Egypt, my guide (who I will say was wonderfully knowledgeable on historic matters), stated that the reason many properties had rebar extending upwards (e.g., it looked like there were more stories to be added) was related to tax policy. I forget the full detail of her explanation, but there was some different kind of tax treatment if the building was "finished," so there were a number of approaches to not "finish" a building.

Edit: From some subsequent Googling, it appears this tax explanation was, at least, historically true in Egypt. There are reports that this policy may have changed in the early 2010's.


Same in Spain. Paperwork surrounding a newly build house costs a lot, up to 25% of the whole project, so in many instances people decide to build illegally. Nobody touches them as it would be a massive political uproar if any ruling political party tried to clean the situation up. Also, if no neighbors 'denounce' an illegal building, it becomes legal after 4 years or so.

Hem, not... this is not how it works in Spain. Maybe a local exception, but not the rule. The law is very clear about it.

If you know some locals who own apartments in the metropolitan areas, many will be open about their different modifications they have done without proper permits, because it's so damn hard to actually get the permits.

Yes, the law is very clear about a lot of things, but what happens in reality is often not so clear always.


Building a new house is a different situation than closing your terrace or building a pool and involves much more permits. You will not be allowed to contract tap water, electricity ot a telephone line to have internet without those.

Permits for modifications in extant buildings can be also hard to obtain if the area is historical and buildings are singular, old or protected for some reason. Specially if you want to mess with the load that the structure must stand. Out of this areas there is often a 'permit free' period in Abril-May for doing small repairs and repainting.


https://www.spanishestate.com/resources/tips/1/ otherwise known as Certificado de fuero de ordenación or Certificado de asimilado a fuera de ordenación

We are not in 70's anymore. I would strongly recommend foreigners planning to buy a house in Spain not to take this for granted and to consult the current law first in https://www.boe.es.

You "can build in the middle of a dry riverbed" (if nobody is watching) is not the same as "you will be allowed to repair" when your house will be flooded six years later. (And it will happen, because this place was called 'las ramblas' for something).

The real state promoter wants your money, not your friendship, so using the services of a professional consultant can save you a lot of future headaches.


In India lots of buildings leave rebar open on the top floor/roof because they expect the government to allow them to add a floor in the future.

The government often obliges.


Youtube has real estate virtual tour walk-throughs from around the world. Sorry, I don't know how to search for them. A few days ago, I saw this one[1] from Bangladesh.

A concrete slab multi-story. IIRC, first floor was occupied residential - here are some hesitant people, their stuff, a shrine room. Second floor was bare slab with construction detritus. No walls, interior or exterior - "can customize". Third floor was also bare, no walls, no roof, forest of rebar. Very roughly, IIRC.

Meta: Wished I could copy a list of yt links from browser history, and get a page of thumbnails for a fast visual search. A little script later, found it.

[1] https://www.youtube.com/watch?v=3R6Fagr8yBM .


I think it's more that people don't have the capital to make a second floor as they're building the first floor. I'm sure regulatory hurdles occur as well. It's common to eventually add a floor or two for rental income. Sometimes, the owner will move to the upper floors for better light, a breeze, and a newer home.

My wife has mentioned this is common in Serbia as well. The idea was that you might actually extend the building upwards eventually, but... Not sure if it happens as often as the initial practice is done.

I've traveled extensively through the Balkans and when people ask what it's like, one of the things I say is that everything is old, brand new, and under construction all at the same time.

I believe it has (had) more to do with unavailability of financing. So you save enough money to build the ground floor, the leave it unfinished until you have enough money to build the upper floor, the wait again until you have enough to clad it, etc.

Croatia too.

That's true. When I was staying at a 5-star hotel in Egypt, top floors' some sides were left unfinished intentionally. There was also a lot of buildings without exterior primer and paint (bare bricks). Locals have said that it's for avoiding higher taxes in buildings.

Egypt is/was a strange country when I last visited it.


I've seen and heard of this in Mexico and Latin America as well.

A lot of US housing styles, such as saltbox and narrow townhouses, are also attempts to game older versions of the tax code


Yeah, it was common when I visited Peru 20 years ago.

The tax code wasn't only reason for unfinished buildings. In poorer communities, which couldn't get access to loans, it was common to just buy supplies and do construction bit by bit as funds and time were available.

Homes might start off with as little as bamboo poles in corners and PVC sheets tied between them. I swear I saw some that didn't even have roofs. When they had enough funds, they would buy some bricks and just stack them as walls, throw some roofing iron on top or even PVC sheet as a roof

When they had enough bricks, they would buy cement and construct a solid brick wall. Then maybe some concrete for the floor.

Even in middle-class neighbourhoods, it was still common to construct floor-by-floor.


This is common across the developing world.

Not a lot of people out of our close to 8 billion can afford such a huge expense in one go.


Even in the US this is the case.

Government regulation has outlawed people building incrementally in most cases, so people who can't afford to buy a house generally have to rent forever.

Building a house is usually more expensive than buying a similar house, due to building codes, permitting costs, and costs of utility build-out.


Unless you build it yourself.

If you find a house for sale built by the general contractor for themselves, it's probably very well built. In a lot of ways that wouldn't be obvious to the vast majority of people.


I would imagine that purchasing the land is at least as much a hurdle in most places. I suspect the land my house sits on is worth some small multiple of what the structure is worth.

At least in recent Mexico it's not because of taxes.

People don't have enough money to finish it and they leave it for later which usually never happens. Also they leave the possibility that next generation can add a new floor.


I live in Mexico and can vouch for this answer.

Especially the never happens part.


Mansard roofs, also.

Years ago I read the same about places in the US as well. And of assessors being really intrusive. People being butthurt because they feel they are being punished for keeping their house up.

I've heard California used to base assessments on comparative values so that people don't try and game the system with crummy substandard construction and materials.


Well it's natural that people feel it's unfair to tax them more just because they make their house nicer. It's just a very unfair tax.

Think about it. You spend money and work a lot of hours to refurbish your kitchen and then you're informed you have to pay more because of it. I am surprised people don't rebel against this policy.


Another reason to avoid getting permits for remodels.

They do and they did. But there taxes are used to buy bullys and guns and put that rebellion down.

This would never be possible in the UK.

Rainwater and sea spray would corrode any exposed rebar away within a few years.

In fact, I wonder whether it is such a good idea to build on rebar that has been exposed to the environment for an extended period of time.


when people actually care about protecting the starter bars (exposed rebar to star the next floor), you can cast a very weak concrete (1-2 MPa crushing strength) around them. When construction continues, you just chip out the weak concrete, clean the bars with a wire brush and carry on.

But if there is never good intention to actually "finish" the construction, then it wouldn't matter much.

True, but still, moisture can creep in where rebar exits the concrete, and lead to rebar corrosion inside the structure. Less of a problem in Egypt than in the UK or similar climates.

sea spray? Britain isn't a narrow coastal strip.

You can wrap it in plastic and this is a non issue

Plastic doesn't hold up well to sunlight.

Luckily this isn’t an issue in the UK.

Spray it with truck bed liner, job done.

My experience living on a Florida key gives me the intuition that that is false, unless by wrap you mean seal

I was unaware of how incredibly destructive the combination of daily, continuous, direct sunlight, humidity, and salt water was until my parents moved to Florida. It's really incredible. A few years and literally every material is mottled and crispy.

The entire state of Florida should be a nature preserve, maybe it already is.

One could always paint the exposed rebar to protect it.

The point of sealant is that it won’t come off easily. But rebar with painted-on sealant is most likely less able to properly attach to concrete. Therefore, it might be difficult to use properly sealed rebar for further construction?

Grind it off or use some kind of paint remover.

Worst case I guess you could use paint stripper on it before use?

But I expect rebar-sealer exists for exactly this use...


Rebar sealant would only help if the entire rebar is sealed, not just the exposed bit, since moisture will creep in where the rebar exits the concrete. And even then, moisture inside the concrete wall may well cause other problems in the long term.

Not a good idea. Paint on the rebar will severely weaken the concrete adhesion in just a few years.

Construction codes in a number of countries prohibit that.


Or just use non metallic rebar (basalt)

Same in Greece (tax rules) apparently, and there you’ll also see lots and lots of unfinished buildings.

But how people can live in such buildings then?

I understand about poorer countries with lack of regulations, but have not thought that's possible in Europe. Government should not allow anyone to live or operate in such buildings if they're not up to code and are not finished.

How people can get mortgages for such things, or how business can register their offices if building is permanently "under construction"?


Europe is very diverse. From "what are we going to do with all this oil money" Norway to "there are shacks with people in them" Bulgaria.

>"there are shacks with people in them" Bulgaria.

The what now?


I'm guessing he means https://en.wikipedia.org/wiki/Wattle_and_daub or chipboard houses. Super cheap construction (wattle and daub being older houses, usually 100+ year old houses built by very poor people; chipboard being used for sheds and even some rooms, but generally with some extra insulation layers and obviously painted/protected against humidity).

I've only been a tourist in Greece, so definitely not an expert, but....

Take your house. Now add some scaffolding for a new floor on top of it. Does it alter the ability or even quality of living in it?

It might also help hide the pool, which is also taxed.

"Up to code" isn't the same as a safe house. That's just such an american way of looking at issues. All that does is make the legal liability clear. It doesn't make anything safer or nicer.

It's like arguing that a 'stop sign' makes an intersection safer. It doesn't. Real proper pedestrian and cycling infrastructure does. Traffic calming. A stop sign just tells you who gets bankrupted when another person is killed yet again.

Your asking the question 'if it's unclear who can be sued how can people be safe' but these things are completely unrelated. As any statistic would tell you.


Having worked construction in the US, "up to code" does at minimum mean a safe structure. While different municipalities may have extended code to allow for unnecessary regulations- much of the actual core safety stuff is much more strict than what you may see in many developing countries.

> That's just such an american way of looking at issues.

You could not be any more wrong and your rant at then end was irrelevant on what I've asked.


People often don't get mortgages for such things, they're frequently working illegally or working legally for minimum wage and being paid cash the rest. Businesses can definitely do the same. If anything, these buildings are frequently built up slowly over years or decades, on paper being built by friends and family, so there's no need for a pesky bank loan to build the thing, just finance it from savings.

And regarding lack of regulations, I can assure you that about 50% of Europe isn't too keen on regulation, either.

Plus, few people are that stupid. This isn't actually dangerous. They generally leave some "decorative" rebar sticking out somewhere over 2m or so in the air, or on the actual roof of the building. Nobody can really get hurt, not more than you'd bump into the chimney :-)


If the regulatory compliance situation is such that people aren't finishing structures in order to game it I would be very, very surprised if adding more government to prevent people from using technically unfinished structures fixes it.

It's is common to remodel buildings, you kick out people near the work but on the other side they can still be there. So you need to convince the inspector and bank that the used part is done and the rest can be done later.

In India, due to lack of space, many urban homes are more than one level and leaving the rebar open or partly covered helps to extend the home to another level when financially possible is the explanation I have often seen and heard.

Barbados as well, and a local said it was a mix of tax rules on buildings with roofs and a contract enforcement issue where it's an island community, so local builders have been known to demand a fee from foreigners to "finish" the property.

Seems around the world corruption has an architectural style. Related: https://en.wikipedia.org/wiki/Window_tax


Don't know if it's true, but I was told the same when in Egypt.

But this one is defnitely true and the reason why you see so many bricked windows in London: https://en.wikipedia.org/wiki/Window_tax


I was told by a Bajan that something similar holds in Barbados, viz., the reason you see so many unpainted houses in Barbados is because it classifies them as unfinished for tax purposes. However, I read somewhere that the tax deduction is actually quite small, so take that for what it’s worth.

It's very common in Morocco also. Rebar sticking out of the roof of many regional buildings.

Same situation in the Philippines

Saw lots of this in southern Italy / Calabria

Likewise in Larnaca, Cyprus when when I was there 16 months ago.

Pardon my ignorance, but wouldn't leaving rebar exposed like that lead to corrosion and a weaker structure? Seems like leaving rebar out in the open - literally the top of the building with no shielding - make the foundation for the new floors dangerous?

Why does the integrity of the future floors worry you when the intent was never to add future floors? The intent was simply to make it appear as there was a plan of future floors.

Some commenters mentioned these building owners really do add extra floors in the future. But also, I assume the corrosion would travel down the rebar as well?

Same in Peru, really unfortunate outcome

It is a tradition everywhere in the Middle East. Same here in Cyprus.

Same in parts of Italy - its a very common tax dodge

> The lack of liquidity in the financial system then further limits what banks can lend to builders.

The massive credit expansion is exactly what you don't want if you want to ease the housing market.

The Economist got almost everything in this story wrong.

I have personal experience of being to Nigeria a few times on infrastructure subcontract projects.

The predominant portion of those abandoned construction sites are made by plain fraudsters, take money, make a semblance of construction going, then vanish with money.

Urban apartment housing in most of Africa is seen as something for a more affluent, and well off, much alike how it is in Asia, and not the other way around as it is in the West.

There are quite proficient builders in economically relatively well doing African countries. Take a look on http://www.mhfproperties.com/

Where fraud proliferates are 2nd tier African economies, and housing for people lower on the class ladder (ones who are just entering the middle class, and still want save hard on housing.)

The shortages of cement, steel, and construction supplies bear much more on the availability of housing than any of that "liquidity" thing.

Africa needs more factories, more mills, more kilns, more technical know how. At the moment even such basic things like petrol, and cement are largely import only even in most developed African economies.

This leads to those countries squandering their short FX resources gained largely from agricultural exports, which could've been spent in import of something more useful, and productive, like plant machinery.


> Africa needs more factories, more mills, more kilns, more technical know how.

Building capital requires financing. Financing depends on trust and stability. From your description, it seems like the issue is an ineffective legal system that allows widespread fraud.


Financing (credit cards, furniture rentals, payday loans, diversity business loans) has not made poor people in rich countries rich.

https://m.youtube.com/watch?v=4LSuZGlqL34

African attitudes and behavior are very different from those of people whose nations have developed technologically in the past 200 years. No amount of loans will teach people how to mix concrete or organize an effective workforce. These are things that people either decide to do on their own or have imposed upon them by a colonial power.

I oppose ensnaring third world nations in debt. Either give them free stuff or let them figure civilization out on their own. "We can help them while making money at the same time" is always a veil for exploitation.


> Financing (credit cards, furniture rentals, payday loans, diversity business loans) has not made poor people in rich countries rich.

Predatory loans are not the whole picture. Stock markets and business loans have made many poor people rich. I know some of them.

> No amount of loans will teach people how to mix concrete or organize an effective workforce.

Student loans can help here.

> I oppose ensnaring third world nations in debt.

The developed world does not have a monopoly on finance. Credit unions and microcredit are possible anywhere, but nevertheless depend on trust and stability.


> From your description, it seems like the issue is an ineffective legal system

There are African countries with well functioning legal system.

Widespread fraud is, you know, happens much across the rich world, and victims are usually much the same demographic.


No doubt fraud is an issue everywhere. The question is whether it incurs cost on the fraudster. You mentioned people who took the money for construction and disappeared - why were they not sued or prosecuted?

Fraudsters can equally well disappear in USA or UK, and they certainly do so.

You can't prosecute a man going missing without a trace.


[flagged]


Actually, what those African nations need is a tiny enclave, a special economic zone, that has the rule of law and is kept stable at all costs where western nations can invest as much as they please, while leaving the rest of the country alone so that the rest of the country can catch up to the standard of living of that enclave, without western influence.

Can you give examples of where this has been tried before. Also, this sounds like how we were colonized the first time. Giving enclaves to the French and the British that became staging posts for full colonization

I'm a bit late, but I suspect the poster is referring to a theoretical city type called a charter city[1], much pushed by the economist Paul Romer.

None have been built, although both Madagascar and Honduras briefly considered the idea. The theory is presumably inspired by Hong Kong, but obviously Hong Kong wasn't set up with any such purpose.

[1] https://en.wikipedia.org/wiki/Charter_city_(economic_develop...


Well, if you see any pasty Englishmen with pith helmets and Martini-Henries show up at the dock, just turn them away. Britain's power projection isn't what it once was.

Sounds like he's describing the Chinese model of development. https://en.wikipedia.org/wiki/Special_economic_zones_of_Chin...

I think Hong Kong is a pretty good example.

> exploitation by industrialized nations

We hear a lot about how China invests billions in Africa building highways and such in order to have influence. I have a conspiracy theory based on stories I heard. It would be nice to know if is true or not. What Americans don't realize is that the Gambino crime family didn't just dissolve, they went to Africa, and they bought rights to natural resources such as coal. They have since the early 2000s become the brokers between natural resources in Africa and 3rd party buyers around the world and their business is violence.


You do realise Africa is massive and that a family of white, American-Italians wouldn't have much chance causing influence (even with violence) in certain African countries? Not to forget the difference in languages across those countries.

So my question is: why do you think the Gambino family moved there and what evidence do you have for your claims?


If I had evidence I sure wouldn't post it from an account with potentially identifiable information. Let's say a New York Times investigative reporter for curiosity did a piece on where the associates of the Gambino family are today, don't be surprised if some of them own legitimate businesses mining and shipping natural resources from Africa. There are lists of associates and they have legitimate businesses that pay taxes. There really aren't secrets here. The activity is above board. So what if they are bribing people in Africa? The FBI doesn't care. The CIA doesn't care. Also, I'm careful about saying 'white, American-Italians' because there are likely dark complexion Sicilian Italians involved too. They are connected to North Africa, a hop skip and a jump away, however, the stories I've heard concern East and Central Africa.

King Leopold of Belgium and 200 white advisors ruled all of the African Congo with a mostly black army that they assembled.

I can't find anything about the Gambino family having assets in Africa.


Great point, though I suspect being a king and having a whole country and army support your colonisation of a country is outside the power of most people.

Edit: I get your point now that the king paid locals to help cause "crimes against humanity" ... I'd say given modern media practices that a mafia don doing something similar would be most difficult.

This thread reminds me of the Netflix TV show Lillyhammer on a smaller scale.


>the king paid locals to help cause "crimes against humanity"

That's actually not true. King Leopold forbade his soldiers from using indigenous fighting and torture practices, but some divisions with black commanders continued the practice against the king's orders. Leopold was criticized in the Belgian press for allowing black officers to command as those atrocities were viewed as a foreseeable outcome of such policy.


> They have since the early 2000s become the brokers between natural resources in Africa

Africa is a big place.

Where exactly in Africa? If you have some sources, this sounds like an interesting read.


> What is going on? Start with the lack of finance. Many Senegalese developers struggle to obtain loans without hefty collateral. Instead, some start building, hoping to tempt buyers to put down deposits on flats and then use that to help finance the rest of the building. But buyers are wary of making a commitment based on a construction site. These unfinished projects often tie up prime land, too.

> For Senegalese hoping to build their own homes, mortgages are rare. In all they cover only about 20% of the need. Across many African countries even the cheapest newly built house is unaffordable for most people. Instead, people break ground knowing they do not yet have the funds to finish. When they earn a little more money they add more bricks.

I think it's worth noting these two paragraphs above because, whilst the topic refers to "unfinished buildings" (which, depending on your local English dialect, typically evokes a sense of large buildings being constructed), the same financing hurdles apply to far smaller "buildings" across Africa - such as single room homes and other types of small dwellings.

> The shortage of finance makes a vicious circle. Many Africans, in effect, save in concrete. Thus money gets tied up for years in unfinished buildings earning nothing, rather than being put into a business or bank where it could earn a return which could allow would-be homeowners to build more rapidly later. The lack of liquidity in the financial system then further limits what banks can lend to builders.

A vicious circle indeed.

To the more economically astute among us, how would a country go about solving this problem?

Any historical analogies would be appreciated.


> Instead, people break ground knowing they do not yet have the funds to finish.

This is pretty common actually. You build one room, make it livable, and then build the next room, then the next, and when you run out of land, start on the second story. The end result is that a young family with children can own their own home, and live within their means immediately, rather than spend a decade renting and saving towards a down payment. You can see this over and over in the favellas of South America, and even on the outskirts of major cities in Vietnam like Hanoi and Ho Chi Minh City ("Saigon").

Modern/western building codes do not allow for this kind of piecemeal construction, which is probably why it seems so odd to us.


Reminds me of a documentary I watched about opal miners in Australia who live underground (in nice houses, just underground) - when they want a new bedroom they just get a jackhammer out and hew one.

Coober Pedy is one of those places I'd kinda like to visit someday.


Well my experience as a person living in Eastern Europe is that EU funds are just very expensive roundabout subsidy for German car manufacturers - since everybody steals bulk of the money and buys expensive cars.

So injecting capital is almost guaranteed to not work.


And yet in terms of economic development countries which joined EU are doing quite markedly better than those that didn't. Obviously, there's some selection bias -- only those who sort of had their shit together were allowed to join. And also just plain market access would have account for some of that. But still, as a person who grew up in EE in the 90s, I feel like people are very quick to forget how bad it really was, and how quickly -- within a generation -- things drastically improved, and how unusual that is.

Money isn't capital and this issue can be helped by giving not money but coupons that can only be used for construction.

Without effective retail finance, which is not possible without other things in place first, which are not possible without a baseline of functioning governance, there really is no 'organized' solution that's going to work.

You can't have well run banks without commercial law, you can't have commercial law without great schools, law schools, good legislators, a judiciary, acting in good faith and 'not corrupt'.

Without a systematic, organized solution, it might be worth teaching people skills and abilities that serve to create value without the overhead - for example, carpentry, masonry etc..

My grandfather and family built their own home, their own cottage, installed all of the plumbing themselves and this is in a 'modern nation' less than 100 years ago, and it was not uncommon.

However - they were highly skilled craftspeople, with knowledge and abilities passed down from generation to generation, information that made it 'across the Atlantic' from Europe into the new world without state organs, schools etc. to do so.

We have a hard time today grasping that, we kind of expect 'the government' to make the right trade schools, colleges and universities available for 'where all the knowledge is' but it was never really that way.

Without extra currency floating around to facilitate loans etc, then it's the labour of communities i.e. family, friends children. Amish and Mennonite communities are strong examples of this kind of behaviour, not that they are necessarily the perfect example, but you can see it in action.

There's so much focus on 'top down governance' approaches in these areas because it's the issue that our own governments can speak to in terms of money, grants, investment, and actors on the other side can sign agreements talk about plans etc..

But in reality it's probably worth sometimes looking at such systems as not very governed at all, and developing things that work very well on the local level.


The problem is not just lack of liquidity. If that was the case, the simple solution would be to just print a bunch more money. Then people would have more cash laying around, more of it would end up in banks, which would allow banks to extend more credit.

However, this is unlikely to be the root of the problem. More likely is that the national economy is simply not productive enough to reach the production levels needed to enjoy prosperity similar to the one observed in developed countries. What that means is that on the one hand, too much of existing production is going into consumption, and too little into investment. Instead of building more houses, they should be building more cement plants, more building material factories etc, and the same goes for other sectors of economy too (eg if agriculture mechanization allows fewer people to work on food production, more people will be available to work on house construction). Of course, given the already low levels of production and consumption, it’s hard to reduce consumption even further, but then again, prosperous western countries used to be just as poor in the past, and they managed to pull themselves by their bootstraps anyway. In many ways, African countries today have it easier, as the knowledge of what to do and how already exists.

In addition to too scarce investment, a second major factor is differences in productivity on individual worker level. The sources of these differences are really diverse: they range from bad people management practices, through use of inefficient work techniques, higher human error rates resulting in more time wasted on useless products, and many more. This is a harder problem, and there are no simple solutions, but on the bright side, the longer economy is stable, the more companies have time to mature and refine their practices, so this is improving on its own over time.

And lastly, there is often problem of bad institutional practices, like excessive taxation, excessive regulation, government corruption etc. It’s much easier to build a cement factory when you don’t have to care much about environmental regulations, and this is exactly the regulatory regime that countries like Britain, US or China enjoyed when they were climbing themselves out of poverty. Similarly, there is more money for investment, if the government is taking less of it. This sounds like something easy to change, but in practice the institutional inertia, combined with copying Western practices as of right now rather than as of when they were of similar development levels makes it harder than it should be.


That's vastly inaccurate.

Unless they talk about some really poor Central African countries, it's not a problem in more well off parts of coastal Africa.

A Kenyan, or Nigerian family of economically active class can buy their first property in cash.

The talk here is a about the part of populace who is just above living in slums, and informal housing. A very different matter without a doubt.


> That's vastly inaccurate.

Which part of the article (or my comment), exactly, is vastly inaccurate?

Having lived in an affluent part of coastal Africa for a couple of decades, I am intimately familiar with the wealth disparity which you speak of.

But I don't see how the luxurious living of the minority renders the overall arguments in that article inaccurate.

Please help me understand what you're referring to?


I am referring to them singling out that "liquidity" thing as the sole culprit, while much more obvious problem of omnipresent "fraudstrepreneurs," and cost of construction materials outside of tier 1 economies of Africa is not even mentioned.

Saying simply, credit availability make little difference for construction business in already relatively well doing countries in Africa, and everybody else will have much more obvious issues to deal with first.


The population of Senegal is 13 million, with only 50,000 Europeans:

https://en.wikipedia.org/wiki/Senegal#Ethnic_groups

Or 99.6% African.

The Top 40 countries by HDI are all European or East Asian (excluding those with oil):

https://en.wikipedia.org/wiki/List_of_countries_by_Human_Dev...

Why don't countries like Senegal seek to increase their European and East Asian populations until development targets are met? They could offer tax-free immigration and residency.


I've heard quite extraordinary stories related to the "grabby kin" problem. Entirely hearsay, but at the same time too common. Most of them keep to a similar theme, that is a combination of entitlement to resources held by your relatives and a lack of emphasis on long-term gains. Probably half of these stories involve someone just getting a small business off the ground and losing it because relatives think they're entitled to anything you own. The food stocks for their vendor cart are eaten by a relative, building supplies are taken to repair a relative's house, seed stock is raided to feed a relative's animals.

Indeed, this is the theme of Ousmane Sembène’s film Mandabi that recently got a nice release from Criterion: a Senegalese man gets sent some money from a relative working in France, but his family, neighbors, and local officials all demand a slice of it, and ultimately he not only loses the money order, he loses everything.

Barack Obama discussed this culture quite a bit in his first book, Dreams from my Father. He went to Africa as a young man for the first time, and it provides quite an interesting look at what modern Kenyan life was like at the time.

Having lived in southern Africa for 14 years, I can confirm that this is tragically common.

One big problem is that modern capitalism is intensely individualistic, as is Western culture in general. African culture, on the other hand, is completely community-focussed. The individual does not exist apart from the community (family/village), therefore there is no concept of "private property".

This makes for a lot of frustration in intercultural interactions between Westerners and Africans. It's also the reason why almost all successful local development projects target the entire community, not individuals.

(This is not to judge one culture or the other! Just to point out that an economic system developed in one culture cannot be expected to work without problems in a very different culture.)


It's not culture. It's poverty + weak states.

If you don't live in an advanced organized country and you are poor you have to rely on your local group. How else are you going to survive?

If you educate those people, put them in an advanced country and make them well off, you will see individualism appear.


Could also be biological. ie: the Hajnal Line theory.

Aside from being pretty thoroughly disproven, what does the Hajnal line have to do with Africa?

Basically UBI...

No, nearly the opposite. Look up the meaning of the word "universal".

A few years ago I read an article that argued that one of the best ways to help many African countries would be to send accountants and help set up a cadastre.

In case anyone else doesn’t know the word cadastre:

> a register of property showing the extent, value, and ownership of land for taxation.


England called theirs Domesday (Doomsday)

https://en.m.wikipedia.org/wiki/Domesday_Book


Nowadays it’s the Land Registry. It would be pretty cool if we did call it the Domesday Book, but alas..

Our land registry is really dodgy and enables corruption though, and not one to emulate.

And if that is set up properly, you can combine it with o make some great interactive visulalizations like https://3dbag.nl/en/viewer

This was a theory of Hernando De Soto in the 90's. He produced quite a bit of research / statistics on the subject, doing surveys over 100 countries. If you want to read about him, there is this article [1]

I remember watching a documentary where they reproduced his experiment. Essentially, send a team of students in each country on a mission : create a company. I've done it in the UK, it's one day and 70 pounds. In the documentary they showed the complexities for just the administrative act of "creating a company" in (I believe) Argentina. It took them 3 months.

[1] https://www.investors.com/news/management/leaders-and-succes...


That sounds like the conclusion from the book The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else, by Hernando de Soto (2000).

In his research he found that the legal system around property was very ineffective for poor people and many developing countries. They followed real life cases trying to bring properties/businesses from the informal sector to being fully registered and taxed.

It was often a many year process and expensive. Owners would also have preferred to pay taxed when getting access to fully legal status, access to banking and capital markets an important one.

Findings where from places like Peru, Egypt, Philippines (if memory serves me), and contrasted with places like US, Germany, England, Sweden, and Japan. The latter mostly had a well structured, democratic system of property law and registries available to everyone, not just the wealthy or powerful.

Edit: Another key element was to open a process to convert squatted land into legal property. Many times formal land ownership was not conforming to lived reality, and some legal title nobody was interested in any longer was blocking legalization of actual use. US homesteading regulations are one example of how that was done, but all western countries mentioned earlier have or had equivalent processes.


> Another key element was to open a process to convert squatted land into legal property. Many times formal land ownership was not conforming to lived reality, and some legal title nobody was interested in any longer was blocking legalization of actual use.

the process: https://allthatsinteresting.com/wordpress/wp-content/uploads...


It’s been tried but the political opposition is massive for various reasons.

I find this very interesting, why do you think there’s opposition to it? So property owners don’t get taxed on the real value of their assets?

For instance in Ghana, most land is leasehold not freehold due to the fact that land historically belonged to a family group or community rather than a person. Thus central government schemes to tax land have two arguments against them. First is that no one knows who will be taxed, and since who is taxed is synonymous with who owns the property that’s an added problem as people believe they are being unfairly deprived of their birth rights. Secondly, taxing property which is leasehold is problematic as the people making use of the land aren’t the owners. The owners have generally already spent the leasehold advance, and in the case of 99 year leases are likely already dead. So, the only people you can collect from are the tenants which leads you right back into problem 1.

In practice though, people pay property tax on assessed value of buildings, but it’s not the same as land tax so an unfinished building can be counted as worthless depending on its state.


Not everywhere has US style property taxes. More likely the problem relates to ownership and title: quite likely a lot of property will technically be squatting. The book "The Other Path" by Hernando de Soto goes into this; the best solution is to award title to long term occupiers.

> why do you think there’s opposition to it?

There's still lots of small property owners that are still poor that would prefer not paying taxes on their small holdings.


Great podcast episode/book chapter by Tim Harford on the value of a property register (9 minutes): https://www.bbc.co.uk/programmes/w3csv3gt

It was probably this one (Dutch): https://decorrespondent.nl/4060/wat-is-oersaai-en-gaat-de-we...

It actually argued for lots more bureaucracy, not accountants particularly. And for a cadastre / land registry. And indeed mentions Hernando de Soto's work in Peru and Egypt.


This article, coupled with the ideas in Lombard Street, makes it sound like the lack of deposit banking is another big problem.

Unfortunately, if it's cultural (you owe your relatives any spare liquid capital you have) then I don't know how to fix it.


Much of Africa's banking infrastructure is handled by cell phones.

Ghana and DRC are trying to set up a cadastre using blockchain, let's see how it goes.

Many a Zimbabwean will tell you that none of this matters if the local police refuse to arrest people (violently) contesting your ownership.

In fact, the police (and local politicians) are often present to contribute to the threat.


Like they have in South Africa? That's going well...

Not sure what you're referring to, since South Africa has had a well-ordered and fully functional cadastre for well over a century (to my knowledge, probably quite a lot longer).

Yeah, it's also had money for at least that long too. I was referring to it having one of the highest crime rates in the world and the highest inequality coefficient by a considerable margin.

When I talked to someone running a "work & travel" agency in Europe that was mostly frequented by young people looking to do "something meaningful" in poorer countries he mentioned that an open secret was that frequently these kids would end up helping "construct" buildings only for those to be torn down again afterwards because they weren't up to spec and local craftspeople would then rebuild them properly on their own.

Sounds like an urban legend. If the local people want the building, why not guide the helpers so they have a proper building from the start, rather than waste their own time building something shoddy, tearing it down, and building it again?

My Western viewpoint also thinks there isn't much "spec" that poorer countries follow, maybe just: if it looks like it won't collapse, it's good enough, and hopefully young people also can judge whether a building looks like it's going to collapse or not.


The college kids are paying money for food and lodging. They're basically paying for an adventure and a cozy feeling and they get that.

People in poor countries don't need scrawny wealthy college kids to help them build mud huts that are "good enough" as long as they look like they won't collapse. Not to mention that most of those kids probably have no prior experience building anything by hand or the physical strength, energy and motivation to be truly helpful.

Considering how much HN celebrates entrepreneurship and "disrupting" established business models, I wonder why you think they're more likely to be inept enough to benefit from an untrained, unskilled and likely undermotivated foreign kid helping them build things than having figured out there's a business in selling the "foreign aid" experience.


Deluded HN commenter (or HN hater, with your nickname) thinks people in poor/developing countries would make such elaborate scams.

As I've replied upthread, the kids could just be told to carry bricks and wooden planks (and hammer some nails in - it's not rocket science) and they'd probably feel glad they contributed.

If I wanted to scam some Western kids, I'd just start a construction company, get them to volunteer, and tell them we're building an orphanage, while pocketing the profits for the office building being constructed. Not tell them to make something and then tear it back down when they've left.


How is this a scam? The kids got what they paid for and the locals got paid. It might be a scam if the agency is pocketing most of the money but then we're not talking about people in poor countries making scams but Westerners scamming Westerners.

Did you watch the NRA guy's "elephant safari" footage? Rich people in Western countries pay good money for "hunts" with their only involvement being to pull the trigger for the final shot on the already downed and dying fully domesticated animal. No need to go through he hassle of actually teaching a foreigner to read tracks and shoot straight first if they just want to feel like they accomplished something.

The point isn't to scam Western kids. The point is to provide a service. The Western kids get to "help" build something, the locals get money to actually pay for people to build it properly (or literally anything else because unlike unskilled volunteer labor, money can be exchanged for goods and services).

I'm genuinely surprised you seem to think poor countries are poor in a way that can be solved with an influx of unskilled labor. Poor countries lack money, not unskilled labor.

What's going to convince more rich Western kids to do "charity work" in your country? Using them as the untrained and unskilled labor they likely are and telling them to haul bricks for a week until they are sick of it or hurt themselves, or letting them feel like they meaningfully contribute without overexerting themselves and then clean up when they're gone so you can go back to doing something productive? Contrast the PR implications of "yeah, I went there and they only let me haul bricks for two days until I threw my back out and now I might not get the football stipend" versus "yeah, I went there and helped them build a school but I heard they had to rebuild it later". People are much more likely to glorify the later (even if they didn't contribute much) and to dramatize the former ("the food was terrible, the weather was bad, there were mosquitos everywhere, I couldn't get any sleep, I was constantly in pain and they had no doctors"). Even without getting into liability, letting the wealthy foreign kid "play" rather than do anything actually important or dangerous to them seems a far safer option.

They're selling an experience and there's a lot of money in doing that. It's just another form of tourism.


Them throwing out their backs is your fantasy of what would happen. Even bricklaying or putting up roof shingles isn't something so hard that it takes more than an hour of training. And with the right amount of "Thank you white kid!", those kids will feel they've greatly contributed either way.

Whatever, I'll still think it's an urban legend until someone posts some credible links that says "It's true".


That is a fairly rudimentary viewpoint. People who've put up tens or hundreds of buildings in their lifetime are clearly going to be substantially more experienced and talented at doing that process than you, I or any random teenager. There's so much more work to creating a functioning abode than just evaluating 'will it collapse'. Would you trust a random youth to put up your house?

But the random teenagers (my guess is it'd be more like twenty-somethings) would have the locals' guidance and supervision, surely?

And it would be a lot more efficient for the locals to use the manpower properly (with supervision) rather than letting them "play" and then having to tear down what they built.

At the worst case, the helpers could just be made to carry bricks and wooden planks from 1 spot to the other, and they'd still feel that they contributed.


Because the tourism brings in the money needed to do it's right. They can probably reuse the bricks and such layer.

One common story I've seen repeatedly in Tunisia, involves poor planning and cost forecasting. Basically, a lot of people think that once the walls and roof are set they'd be 90% done.

In reality, the "finishing" phase can cost the same as the "base" costs (Or more depending on what quality-standard you're aiming for).


Sounds similar to an typical software project.


Greece in the early 2000s had very many unfinished buildings as well, saw those as a tourist.

I've been wondering ever since what the Greek reason for that was - any ideas?


Unfinished buildings have no taxes. And if building company has free capacity, it makes sense to use it. There is no freeze in winter so concrete skeleton lasts for decades.

If it's similar to the Sicilian version, there are many articles on the "unfinished Sicily". Here's one from NYT:

https://archive.is/ht0mF

But one reason, I've read, is the mafia. They have evolved into financial organizations in recent decades, and often bid on and obtain public funds to start new building projects, build out the bare minimum then keep the rest for themselves, iirc.


You didn't have to pay taxes on unfinshied buildings. Also, I heard that there was a swimming pool tax in Greece. But there was no tax on emergency water reservoirs, if you know what I mean :)

There are so many cultural and social norms that make business in the west easier and faster and more reliable. And they're basically invisible until you work somewhere else and have yo get something done.

The reasons for this are complex, but in a word: yes.

Yeah. I should have been clearer above. I'm not saying it's bad or wrong or something. That's just how life is different in different places.

Portugal has the same thing although I've found there are many more dilapidated ruins/condemned buildings, even right in the center of major cities. Just walk around Porto or Lisbon (you could use google street view), and it won't take long before you see a boarded-up or completely ruined lot/building in the middle of the city. Sometimes these places seem like prime real estate, or you can tell they were incredible properties in their prime. My relatives told me it was because there's no property tax, so there's no cost to letting a property sit idle. Also they described how families will pass down property between generations, often the younger generation moves away, only owning a fraction of the property as it is split between siblings, and then split again between cousins, etc..., until it's left without care takers with a vested interest or willingness to spend on maintenance and improvements. I'm not sure if that's the case, but it seemed like a plausible explanation. You'd think after decades of neglected properties the government would try to change incentives to deal with this. But of course property-related legal/tax changes can be very difficult to pass.

It's true in the U.S. as well. There are abandoned buildings all over Los Angeles that are just sitting rotting. Here is one that has been abandoned for years, is burned out, and even sits directly adjacent to a subway station.

https://www.google.com/maps/@34.0767918,-118.2916802,3a,75y,...


My landlord here in a wealthy area of Mexico is supposedly extremely well-off (and the main house looks somewhat mansion-like from the street), yet the back part of the house that you can't see from the street is halfway finished. Hopefully he is going to wait until my lease is up before he really picks up the construction again. I think that's what he said.

Taxes might have something to do with it. But also Mexico is so poor, I think there are just a lot of cases where people just don't have the money to finish a project right away or even tear down an old building. So it's just almost normal to see derelict of half-finished buildings in certain areas. My theory is that it therefore becomes sort of customary and acceptable to leave things like that and so it is more common. Even in cases where people could afford to finish more quickly.


> the only painting is of the scatological variety from the sole residents: crows.

This was weird.


Crow poo?

One is that I know about, is that some people start building the foundations and keep adding/building up, as they get more funds.

*I didn't read the article, so maybe already mentioned




doesn't work for me

Hammer Esc before it fully loads.

Is Denmark planning to send asylum seekers to Rwanda? Read the article here >>> https://www.africanpolicy.com/magazine/is-denmark-planning-t...

Same in asia too - out of money, poor financial forecast and no allocation of funds/resources to build.

There are so many reasons. I think no matter what is said we will walk into arguments that will make us all racists. I'd rather say, because that is what they want.



Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: