Towards the end of 2013, Akua Nyame-Mensah was recruited by e-commerce company Africa Internet Group (AIG) to launch online real estate marketplace Lamudi in Ghana. At the time the West African country was recording “tremendous growth in GDP”, but in the years that followed it has faced an economic slowdown.
Nyame-Mensah, managing director for Lamudi in Ghana and Nigeria, talked to How we made it in Africa about the real estate markets in the two countries. Below are edited excerpts.
Describe the e-commerce market in Ghana when you first launched Lamudi.
There were other companies that were trying to do things online, particularly horizontal classifieds. The websites looked more like Craigslist. With Lamudi we were doing something very specific and just focusing on properties. I think for a lot of people that ended up on our website, what they found exciting is that we focus on one product as opposed to doing everything.
At the time, Ghana had tremendous growth in GDP and other factors that made it attractive to invest in for an online company. It has also come a long way in terms of internet and mobile phone penetration. Ghana was, and still is, an attractive market.
What is your view of Ghana’s real estate industry?
You see a lot of construction in the country. There is still a lot of interest in people doing developments in Ghana. Right now people are trying to do projects that are more affordable. Previously there was a huge push to do luxurious developments because there was a lot of interest and people were looking to Ghana as a place to make money.
I think there are still areas to invest in, [but] that is in the lower-end as opposed to the upper-end of the market. I think on the higher-end of the market there is saturation to some extent, and the economies are slowing down for both Nigeria and Ghana. Everyone who really needs something luxurious already has it and there is also just not as much money in the market.
The majority of the people who are developing in both Ghana and Nigeria are actually individuals. Quite often these individual property owners will look at what other people are building and think, “Those people are building luxurious properties, they are obviously making a lot of money, I should build that too.” Then they build it, and it might look great, but at the end of the day there are not enough people who have the money to actually buy it or rent it. So it ends up sitting empty — and we see that quite a lot in Ghana particularly.
In terms of the searches we get versus what is available, people just want affordable housing — but what is mostly supplied is expensive properties.
How is Ghana and Nigeria’s economic slowdown affecting your business?
When you are working on something like real estate, if developers and agents don’t feel like they are making money, they are not going to be interested in marketing properties. So it definitely has an impact.
But at the same time people realise that our websites are not just accessible within the country itself. There are people outside the [two countries] that are looking, and our websites are the first stop for them when they are looking for property. In Ghana, for instance, at one point about 15% of our traffic was coming from outside the country. These are mostly Ghanaians in the disapora looking for something to invest their money in. Despite the current economic situation, I am extremely optimistic about the future. There are lots of investment opportunities.
So which of the two is your stronger market?
I think both markets are very exciting. We have less competitors in Ghana. In Ghana you can say there are really two big cities. In fact, we mostly get requests for Accra only. But in Nigeria there are a lot more cities that people are looking to move to and buy in.
In Ghana, people put up 10 units and call themselves developers. In Nigeria, we are talking about people putting up thousands and thousands of units. I would say both markets are interesting in different ways.
Describe some of the challenges you face.
Although developers in Nigeria are bigger, they are quite fragmented. A lot of the developments are actually being done by individual property owners, and getting to all those people is a challenge.
There have been lots of strides in terms of the internet but still, getting consistent, really fast internet is a challenge in both countries. I think this is just down to the fact that electricity in both countries isn’t stable all the time.
Any other interesting observations?
One thing I have really enjoyed is building relationships with agents and developers. There are some people we have worked with who had hardly done anything online but now they upload their own photos [and] they respond to emails. I have seen people really change the way they do business because of the opportunities Lamudi and other e-commerce platforms provide.
This is an interesting observation for me, because it is not something you would necessarily see if you were working in the US or Europe where it is normal for people to do things online. But for a lot of people here, even for really large businesses, doing things online can be really scary and so we are holding their hands and taking them through the process and that is very exciting.