Gabon: Reigniting real estate
Gabon’s real estate sector is undergoing something of a transformation following the frenetic run-up to the 2012 Africa Cup of Nations (CAN 2012) football tournament. As the government shifts its focus toward longer-term priorities such as housing, it is also working to address key regulatory challenges in the sector, such as land title reform.
After contracting during the economic crisis, the construction and real estate sector rebounded in 2010, contributing 30.8% to GDP growth as the country prepared for CAN 2012, which it hosted in February with Equatorial Guinea. The government spent $204m on projects throughout the country in preparation for the tournament, mostly on building roads, parking lots, sports facilities and hospitality infrastructure.
Now that the festivities have wound down, the government is setting its sights on more sustainable growth, switching the focus from hospitality infrastructure to housing, and seeking to improve the overall regulatory environment to encourage greater private sector participation.
The change in priorities is visible from extensive restructuring of cabinet portfolios and administrative responsibilities over the past few months. The Ministry of Housing, Urbanisation, Ecology and Sustainable Development was reorganised in June 2011 and is now tasked with focusing on managing the strategy, conception, control and evaluation of public policy and overseeing the sector as a whole.
Similarly, two newly created agencies – the National Planning and Surveying Agency (l'Agence Nationale de l'Urbanisme, des Travaux Topographiques et du Cadastre, ANUTTC) and the National Council of Housing – will be responsible for setting up public and private initiatives in the housing sector in Gabon. The government is also restructuring the Department of Urban Planning and Construction (Brigades Spéciales d’Urbanisme et de la Construction, BSUC), which is responsible for identifying and resolving illegal land occupation and unzoned or unsanctioned developments.
Illegal land occupation has become an increasingly problem in recent years, as the long and expensive transactional procedures have resulted in many illegal, unofficial property sales, and unfinished residential projects have been occupied by squatters. A new building code is currently on the cards identify the needs of these areas, such as required infrastructure, and whether they adhere to environmental protection legislation.
In light of the bureaucratic streamlining, the government is also looking to stimulate growth and investment in affordable housing – particularly since the rural exodus, lack of housing capacity at all price ranges and expensive construction materials have dramatically increased rent prices. Bruno Otah Ondounda, the director-general of the Housing Bank of Gabon (Banque de l’Habitat du Gabon, BHG), an organisation helping Gabonese citizens finance housing purchases, told OBG that “there is an urgent need to increase housing supply as there is a lot of demand, with a housing deficit of around 160,000 units in Libreville and 400,000 units in Gabon.”
The government’s social housing plan, which was approved by the Cabinet following a national forum on housing in 2010, calls for the construction of 5000 units per year starting in the same year. After a series of delays, a call for construction bids was issued in November 2011 for the first phase of the plan, located at Angondjé in the north of Libreville. However, all of the bids were subsequently rejected, being deemed too costly. As a result, construction has yet to begin.
There are other more complicated challenges as well. The country’s outdated land registration system can make identification of ownership and land transfer a difficult and timely process. Indeed, it can take anywhere from five to 10 years and 134 separate bureaucratic steps – involving seven governmental bodies – to gain title to a deed.
To this end, the ANUTTC has overhauled existing regulations and laws to streamline the land registration process and has adopted a target time period of six months per land transfer. The ANUTTC is responsible for technical aspects as well, such as geographical surveys, topography analysis and cadastral surveys to better identify land ownership.
Other duties, however, will be beyond its remit. For example, administrative responsibilities concerning the signing of land transfers will be handled by the tax authority, while land registration and deed allocation will be undertaken by the court system. In order to streamline the process, the ANUTTC is setting up a “single window” to formally register land titles, handle land allocation requests and adjudicate complaints.
Reforms undertaken by the ANUTTC since its creation last year also aim to reinforce landowners’ property rights, both through a clarification of ownership and by facilitating the formalisation of land titles for landowners that have already invested in specific parcels of land. Formalisation can be problematic, however, as many land transactions are unofficial, leading to disputes over property rights. To rectify this, the ANUTTC is compiling a database of land titles to clarify land ownership and is also planning on launching a project to develop 15,000 parcels of land over the next three years.
Provided the government can clear up these regulatory issues, given the extensive streamlining of the public regulatory agencies and the renewed focus on more sustainable segments, it looks as though the real estate sector is on track to implement long-term reforms and plans that should see it continue to grow well beyond the limits of big-ticket events such as CAN 2012.