Back to Nairobi, More Building, Less Change

ACORN International Citizen Wealth Financial Justice

IMG_0467Nairobi    After an absence of three or four years where I’ve kept up with ACORN Kenya and its work through Skype and written reports, I was curious how different Nairobi might look when I hit the ground. The line at Customs was no shorter despite a new requirement that visas be obtained via the internet before arrival, which given the special lines for visas and the continued presence of a booth to register on the spot seemed to be honored by many in the breech. Unlike international Indian airports that always seem to be undergoing upgrade, there was some construction in progress, but mainly it was an old coat that fit the same. I was surprised not to see vestiges of signs welcoming Obama’s recent visit, but so far it seems that has already passed into the world of “been there, done that.”

The real difference seemed to be along the wider highways coming into the city and the amount of mall and apartment block construction in the miles leading to the roundabouts where traffic snarls in the daylight. There seemed to be new buildings dotted here and there everywhere, but as interesting as that was, there didn’t seem to be many lights or much activity around the malls and many of the apartment blocks looked strangely dark, either uncompleted or unoccupied.

There may be commercial construction but it is unclear that citizen wealth has caught up to what it might take to make it sustainable, though I may be in the wrong postal codes still. When I was training in southern Italy a year or so ago, I met a representative of an Italian NGO that worked in Kenya and he told me they had a social enterprise lodging operation called Shalom House converted from an old convent it seems. It wasn’t easy to find. Once you leave the Ngong Road, one of the cities lifeline thoroughfares, it is as dark as a rural area’s countryside even though you may be looking for a place only a couple of hundred meters away from bright lights and big city. From the time you step off the plane and throughout your stay the smell of smoke fires is also everywhere reminding you that the bush is right on the other side of the mall parking lots and the charcoal cooking fires of the ubiquitous slums are still burning.

The Economist reports that there is a property development boom in Nairobi now, but the money fueling it is something of a mystery. It’s not from home mortgages that’s for sure. As they report, “According to estate agents, just 22,000 home loans exist in the whole of Kenya, and half of these are reckoned to be to bank employees at preferential rates. Loans at market prices are punishingly expensive, carrying interest rates around 15% or higher. Rents by contrast are cheap: mortgage repayments can be two or three times as dear.” In fact much of the property boom including in emerging exurban areas along recently completed expressways out of the city is by cash. Some blame rich Somalis, which is almost a contradiction in terms.

It’s hard to have a crash without extensive lending, but whoever is paying the piper may lose a pile. Investment bankers argue that shopping malls are being built in areas that lack the population to support them according to the Economist as well. From my ride into the city it also looks like there may be a problem in this city of slums finding tenants willing to pay the rents in the apartment blocks being built willy-nilly as well.

Without raising per capita income and employment so that the tide holds up all the boats, many sharpies and wannabes may find that they are building ocean liners to float on parking lots, and most evidence holds that doesn’t work well.