Wadau, it is of no surprise to any of you when I say Kenyans have a land fetish that is difficult to explain. The smaller the piece of land, the more they crave to own it. Having a document that says you own a plot (read ‘really tiny piece of dirt’), is supposedly such a big deal, sponsors have resorted to enumerating their plots to net slay queens. Apparently nothing makes the slays run faster than the mention of a sponyo who owns a ‘buroti maguta maguta’ somewhere along Kamakis. In Kenya owning small disjointed pieces of land has become the ultimate status symbol. It would be hilarious if it were not so woeful, for people literally invest all their savings into the hyper-inflated over-priced Nairobi real estate market, like it is the only game in town. The result of this runaway demand is that land in Nairobi derives its value purely from the effects of speculation and is not supported by any intrinsic value in the land itself. I ain’t saying its a bubble nor am I saying that it will burst any time soon. But its a good exemplification of the ‘kiosk mentality’ that Bob Collymore spoke about the other day. Kenyans like copying what they have seen work for others. So if your neighbor starts rearing quails and becomes successful, you and your mother in law jump into the same line of business expecting the neighbor’s success to rub off on you. That is what the plot phenomena looks like to me, the quail business. And so it has become the new status symbol. Nothing says you have your life together like owning a couple of plots.
Those Kenyans with a couple of eighths spread out across Nairobi’s satellite towns are now considered the nouveau riche. Those with quarters are considered quite wealthy, in this warped peasant based mental stratification. By the time you get to the realm of those who own half acres you are supposedly dealing with tycoons. And anyone owning plot sizes beyond that is likely to be a government mandarin or those whom prefer to identify themselves as ‘watu wa serikali’ (on account of their corruptly deep pockets and proficiency at grabbing - and holding onto - land).
The funny thing is that land in Nairobi is undeniably one of the riskiest investments someone can make, given the rampant corruption at City Hall and at the lands registrar. Every day we hear stories of plots that have multiple title deeds and multiple owners thanks to the acrobatics that go on in Ardhi house and all the corruption that stalks that sector. People spend years in court fighting cases that go nowhere while someone is busy eating their hard earned money. And yet despite hearing these news, Kenyans will literally take out all their savings when Maina Kageni starts touting some land in Kitengela sized 40 by 80m and starting at 900,000 shs. It is incredible that a people can be this obsessed, and we literally need experts to use some Jungian psychology to get to the bottom of this phenomena.
On the flip side, in the same country, we have promising entrepreneurs with ideas worth billions which are held back by lack of funding. These entrepreneurs find it very difficult to secure investments for their ventures, and usually either abandon them or sell out. By selling out I refer to where local entrepreneurs will sell most of their companies to foreign investors essentially making those companies foreign controlled entities harvesting off the Kenyan market. We are literally letting foreigners invest in all the high net worth, highly scalable businesses which in a few years will grow into highly valuable companies. We are letting brilliant ventures go under due to lack of funding, and they could have made many millionaires in this country. All that while thousands of Kenyans continue investing their money in a hyper-inflated hyper-corrupt real estate sector.
People will only do what they know best. Currently, land speculation happens to be the only sure money multiplier the Kenya citizen will venture into, often to the detriment of the country’s economy. That said, I would entirely place the blame on the government. As we stand, our Citizens are still in the toddler stage in investment matters and more so on technical matters. Government institutions should lead the way in demonstrating to the citizenry how things are done. For instance, institutions such as KIRDI could put up various demonstration industries where willing investors can gather all the information they need. After a few people have set up such industries, the knowledge can now circulate within the population without any intervention from the government. Similarly, KIRDI should take the initiative to showcase and introduce new technologies. It still saddens me to see Juakali artisans molding car parts using technology that was last used by Sumerians around 3000 BC. The people doing such work are open to any help that could increase their productivity. This is what happened in other countries when they were embracing industrialization. Although the private sector is expected to aid in technology dissemination, this process may take too long to be of any benefit. A technology that would take one year to introduce through government intervention may take 30 years if left to the private sector. Sadly, the institutions that should take such initiatives seem to lack some important capabilities such as critical manpower. In short, it is the government’s responsibility to guide the citizenry on matters investment, and it has failed miserably on that front.
You should link in with the technology hubs across the city and explore what the tech space has to offer. Lots of viable and profitable businesses to be invested in there. You’ll meet a ton of brilliant guys with burning ambitions to succeed. And they are working on big things that can have huge impact on the economy. I say it is worth investing in such ventures because despite their risky nature as start-ups, it is still less risky than investing every last coin into land in Nairobi. And the payoff from such start-ups once they blow up, can be exponentially bigger. Its a safer bet with higher returns.
There is a huge disconnect between theory(Our drunk scholars) and practice( Jua Kali). The day the two sectors will come together things will start happening.Your idea of KIRDI stepping in to help may never work in our country as long as such organizations are occupied by the same uppity Pseudo-scholars who were described by Natty Dread in another post ( The De-fanging Of King Cobra - News & Politics - Kenya Talk )
We are not immune to crunches. Prospecting is the undoing of many. Guys in Detroit USA are still trying figure out what happened. If you have arable land keep a vicegrip hold on it. Plots on the other hand…let me just say dont put all your eggs in one basket.
I agree with this analysis. Government has a critical role to play. But methinks culture has more primacy of a role. We need to influence the culture of grassroots groups like chamas and empower them to take advantage of alternative investment opportunities. The question then becomes how do you change a culture that has exalted one of the factors of production to a divine thing?
Culture changes when you deliberately set out to change it. Show me something that works better and I will leave what I am doing. If a former maize farmer starts doing well after shifting to horticulture, the neighbors will not need much persuasion to go into horticulture. Without visible proof, I will stick to what I know best.
Yeah, very true about arable land. The most natural way to engage land as a factor of production is the growing of crops. I myself am a small farmer and appreciate the value of productive land. To me agribusiness is one of the ventures with high return potential that requires the right mix of entrepreneurship and investment. But how many Kenyans would be willing to invest in a professional agribusiness startup? Most guys would only consider investing in farming if they were doing it themselves (and not many have the time or skills to do it properly given the regular jobs they have)
those preaching the entrepreneur gospel,here is a piece of advice. entrepreneurship is fucking hard and for those who succeed hundreds more have failed.its not for everyone.don’t risk it if you are not ready to lose it all. nunua kaploti ujipange uachie watoto.
Boss the very point I am making is that kununua kaploti especially in Nairobi is a bigger gamble than banking on a startup. From a risk perspective land in Nairobi is hotter than the rear end of a bombardier bettle. That kaploti you buy then fail to develop thinking umewekea watoto you will come after five years and find a nice building standing on it with the owner having all the right papers
What is the need of buying it and then lie idle for years. I would rather invest it in a business. A taxi a month you 40k guarantee. Piga hesabu an year is 1/2 m.
Very good thinking. Most of the places you can buy a plot for under a million are in areas with no good roads or supporting infrastructure. I am going to use the term wilderness for lack of a better adjective. Such places you will have to sit on that land for around 3 or so years
Land is the most expensive factor of production. Before you can embark on any industrial or tech venture, you’ll need space. Renting can be very costly especially when you add goodwill. The Kenyans buying land, are they a few individuals buying multiple properties or is it different people each getting a 50x100? I think with the population explosion about to hit us, acquiring land is the first thing people are planning to do, only later will they feel secure enough to invest in other areas.