Recession flatlines Lagos swank property projects

But today it is mostly an expanse of sand, interrupted by two lonely ultra-modern skyscrapers and a couple of roads lined with young palm trees.

Celia Lebur –
With frozen cranes, deserted construction sites and empty buildings, Lagos is suffering a hangover from a construction binge as Nigeria wrestles to overcome a damaging recession.
Look no further than Eko Atlantic, billed as the largest real estate project in Africa, where frenetic construction has slowed to a snail’s pace. Dubbed the “Dubai of Africa”, the so-called city within a city is being built over 10 square kilometres (four square miles) on tonnes of sand dredged from the Atlantic Ocean off the coast.
Just one year ago, it was a symbol of the promise of Lagos, when Nigeria was still the continent’s number one economy.
But today it is mostly an expanse of sand, interrupted by two lonely ultra-modern skyscrapers and a couple of roads lined with young palm trees. It’s a humble start. In the long-term, the island is expected to house nearly 500,000 people and see 300,000 others visit daily when it is finished in the next 15 to 20 years.
“The business continues but there is no point in going too fast in the context of a general slowdown,” said Pierre Edde, Development Director at South Energyx, a subsidiary of developers, the Chagoury Group.
The first phase of the billion-dollar project is under way, with the construction of a dam to follow.
Edde said some 80 per cent of the plots for sale had already been bought but investors were still wary and “waiting for positive signals to get started” on building construction, he said.
Falling global oil prices and repeated attacks on crude infrastructure in Nigeria’s south severely hit the country’s economy in 2016, hammering the naira currency against the dollar.
Nigeria, which gets over 70 per cent of its revenue from oil, is now suffering from a debilitating shortage of foreign exchange, hitting imports and overseas investment.
“Perhaps the greatest constraint for businesses operating in Nigeria at the moment has been the inability to access foreign currency, notably for importation of goods, and repatriation of profits”, said Roddy Barclay, an analyst at the Africa Practice research firm, in a November report. The extent of the construction freeze is difficult to assess in the absence of official figures.
But Dapo Abe, who heads an engineering consulting firm in Lagos, estimated that some 60 per cent of major construction projects — both public and private — are currently shut down.
“No bank wants to lend money, rent revenues no longer make it possible to repay construction costs, and there is no return on investment,” he added. — AFP