(Photo by Patrick Federi)
I recently visited Benin Republic and spent time studying the real estate market in Cotonou, the capital city. After similar experiences in Senegal and Ivory Coast over the past decade, I've concluded that land continues to be highly profitable in West Africa. I have personally benefited from accidental investments in real estate in the 3 countries above with well above 20% annual return (and 7x in one case).
Below are my conclusions about the various land strategies and their result in my case. To be clear, none of this is investment advice.
Context
Francophone West Africa comprises some 10 countries with a population under 200 million. Most Francophone West African states are also members of the UEMOA monetary system and use the CFA which is pegged to the Euro. In recent decades, many of the coastal UEMOA countries (e.g. Benin, Togo, Ivory Coast, Senegal) saw sustained economic growth driven by significant investments in infrastructure among other things. As usual, land is a first-order beneficiary of infrastructure-led growth.
I distill below the approaches that retail investors can take for land purchase in coastal west-African towns: “Buy and Forget” and “Scoop & Flip''. I also share some tips about due diligence.