The Struggles & Opportunities in Development Finance

Development Finance describes the efforts of institutions, governments and organizations to facilitate socio-economic growth through investment. Over the past decades, many developing countries have received development finance support from global organizations like the IMF, the World Bank and, perhaps most notably, the UN. The UN makes significant financial contributions to support development projects in diverse fields raging from education, health and peacebuilding and even housing. These funds, whether in the form of loans or grants, are provided on conditions of transparency, accountability and efficiency. In spite of this, the history of development finance in Africa is plagued with stories of misuse, ambiguity and corruption. This trend within emerging markets continues to limit the effectiveness of development finance.

A similar observation is reflected in a recent UN housing scandal that sent ripples in the world of development finance. A number of countries including Ghana have been named in a US$ 35 million dollar housing loan scandal at the United Nations (UN). The housing project under the United Nations Office for Project Services, is said to have partnered with a British businessman named David Kendrick to support the construction of some 200,000 homes in Ghana on behalf of the UN. 

Top officials, including the Vice President of Ghana, Mahamudu Bawumia and Matthew Opoku Prempeh, who at the time was the Minister of Education were present at the launch of the housing project which occurred with great fanfare. The Vice President called the launch a “game changer”, however years after the event there is nothing to show for as both UN and government officials admitted no housing project has been built in Ghana. The loans, which were intended to fund affordable housing projects, are still officially pending. A large portion of the loans received by David Kendrik’s company had been used to pay off pre-existing, external debts and liabilities. The U.N. auditors said officials had chosen his companies because they believed his building technology allowed for quickly built, high-quality homes that were resistant to natural disasters. However the resulting scandal and financial mess has threatened to undermine the broader trust of the U.N. member countries in the institution at a time when the U.N. is seeking millions of dollars to deal with global instability, economic and social distress. 

Similarly, experts have shown that the levels of investment in African real estate are relatively lower because of significant challenges in safeguarding and maximizing finance. In particular, the lack of documentation, digitization and trust have limited the ability of stakeholders to add value, collateralize and invest in African property/ real estate. In view of this, there has been a need for policies, structures and tools that can unlock the vast potential of African Real Estate.

Fortunately, in Ghana the status quo is changing. New regulations are being put in place such as Ghana’s 2020 land act while private companies are building innovative, technological solutions to provide the trust and transparency needed for sustainable growth in the local real estate industry. Perhaps the best example of the positive impact of technology on African real estate is the work of Seso Global. Seso Global has built Africa’s most trusted property marketplace which is a unique one stop shop for digital real estate transactions. Through a unique ecosystem of services, they offer buyers access to trusted properties and professional service providers. This allows for a secured end-to-end property purchasing experience along the real estate value chain.

Seso Global has partnered with leading real estate professionals to provide transparency to the property market with the aim of unlocking the trapped capital Henrando de Soto wrote about and to scale the real estate industry.