Unless it’s being used as a factor of production then it’s just wasted capital.
We have trillions of shillings of land which would have provided profitable investments sitting there speculatively. We’re taking a lot of money out of the economy with no visible returns. We are calling for investors but we are not investing, ourselves. We’re living in an era of eased access to financing capital and it’s opened up opportunities to the common man. We’re however not spending that credit on production which would make economic sense. Kenyan loans are being used to buy cars we cannot afford but primarily land, however nondescript. It could be two valleys, a swamp and a volcano later but it’s all worth it because what’s an African without land?
This is one of the clear examples of a culture affecting the economy. We’re unnaturally bonded to the land, to the soil, to the earth and this comes at a price. We’re in the 21st century but that’s still the only investment we can think of. A lot of the time, the land remains bare or has a great big house which we will live in once a year. That’s a terrible way to spend our limited incomes. If you weren’t born in the village, you’ll probably not want to live there anyway. We have tones of alternative investment options but we can’t shake off the need for land.
We are all hoping that the land will appreciate quickly enough to make us quick millionaires because we never go wrong with land and other African fables. Compounding the problem is the fact that we are buying land at unsustainable and inexplicable prices. There’s no excuse for land costing hundreds of millions. A piece of land bought by Someone I know, 20 years ago, at 300,000 KSH is now worth 45M. No, this is not the normal trajectory of appreciation. This is extortion.
We are also feeling the effect of the influx of illicit money- corruption etc, money from S. Sudan, Somalia and other neighboring countries magnanimously have prices travel north with the price of land in Nairobi in some areas cost as much as beach-front plots in N. America or the prices of actual Islands. There’s absolutely no value for money but realtors are selling ‘redevelopment value.’ These land prices are not normal and you should do better things with your money.
We need real growth and capital investment. We need value addition to crops and produce, we need to make our own TVs and electronics, we need to create more jobs for the youth. We NED to invest more in the art sector…We have many more things we could do.
We’re also too poor to have our money sitting around waiting to grow. We have limited disposable income and higher standards of living to attain but we want the lazy way out. We don’t want to put our money into enterprise and make it grow. We want to put it into land and have it grow itself.We’re living through an industrial and technological era with an agrarian mindset.