According to a recent report from Estate Intel, foreign direct investment into Africa’s real estate sector is in jeopardy due to recent instability in the exchange market. Inflation, currency instability, and growing debts are some financial markets that indicate a decrease in FDI in the real estate sector.
The report also stated that though Africa’s real estate sector is rich with immense capacities, it might not live up to its potential due to these challenges. These challenges have turned the once flourishing market into one that investors are planning on ditching.
Nigeria’s currency has proved to be one of the dominating causes for this fall in investing, seeing as the nation’s currency depreciated the highest in the year by 83% in 2023. For the index report on countries with high real estate attractiveness, Botswana and Morocco took the top two spots while Ghana and Angola ranked as the least attractive real estate markets.
Botswana and Morocco’s top spots can be attributed to their currency stability, low inflation rates and low construction costs for buildings. Their inflation rates were 3.1% and 4.3% respectively, as compared with Ghana’s 35.2% and Egypt’s 35.8%. Furthermore, Morocco’s costs for construction per square meter is an average of $600, while the all-county average (all countries in Africa) is said to be about $1,336.
These help to boost leasing services in the said countries, which is helpful for retail and office sectors as well as new investment by social corporations, bringing in affordable housing incentives.
