Monday, July 15, 2024

Ethiopia’s Real Estate Market Woes: The Unanswered Question of ‘Where is My Money?’


Ethiopia: “Where the Hell Is My Money!”

During a casual city tour, a conversation with a friend revealed an alarming trend in the Ethiopian real estate market. He pointed out a high-rise building where he had purchased an apartment unit on the upper floors. Despite having made full payment several years ago, the completion of his apartment remains an unfulfilled promise. This situation is not isolated but seems to reflect a broader issue within the real estate industry in Ethiopia.

Real estate agencies are plentiful, bombarding potential buyers with messages and calls that promise exceptional living standards and timely project completions. However, the reality often falls short of these assurances. The allure of the real estate market appears to be waning, with reports of a significant drop in the number of house buyers. This downturn begs closer examination by economists to understand the underlying causes.

The practice of developers demanding full payment upfront only to delay project completions significantly is particularly frustrating for buyers. This “follow the money” scenario sheds light on a concerning business model where builders, having secured their profits, lose the urgency to complete projects on time. Hence, clients who have fulfilled their financial obligations are left waiting indefinitely for something as fundamental as the keys to their homes. This situation prompts the desperate question, “Where the hell is my money!”

Such practices are not exclusive to the real estate sector. The book publishing industry in Ethiopia seems to mirror this model. Many authors have entrusted their manuscripts to publishers, only to find themselves ensnared in a cycle of delayed returns and unmet promises. Despite making their contributions to the printing and distribution process, authors often struggle to receive their fair share of the profits, if they receive them at all.

Contracts that promise authors a percentage of the net profits seem straightforward on paper. However, the reality is that books might sell out without the author being adequately compensated. Publishers, acting also as distributors, sometimes claim that sales have not yet covered the printing costs, further delaying payment to authors. This too leads to the grievance, “Where the hell is my money!” echoing the frustrations experienced by real estate clients.

The parallel between the real estate and book publishing industries in Ethiopia highlights a systemic issue of trust and accountability. Both sectors witness individuals fulfilling their financial obligations, yet facing extended waits and opaque processes in return. Whether it’s the key to an apartment or royalties from a published book, the question remains painfully relevant: “Where the hell is my money!”

This pressing inquiry, symptomatic of a broader lack of transparency and efficiency, calls for immediate attention from regulatory bodies and industry stakeholders. Both sectors must strive towards greater accountability and fairness to restore faith among investors, clients, and contributors alike. Without significant changes, the dissatisfaction and mistrust will only grow, undermining the potential for future growth in these critical sectors of the Ethiopian economy.

Natalie Kimura
Natalie Kimura
Natalie Kimura is a business correspondent known for her in-depth interviews and feature articles. With a background in International Business and a passion for global economic affairs, Natalie has traveled extensively, providing her with a unique perspective on international trade and global market dynamics. She started her career in Tokyo, contributing to various financial journals, and later moved to London to expand her expertise in European markets. Natalie's expertise lies in international trade agreements, foreign investment patterns, and economic policy analysis.

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