Property development in Malawi II
Acouncillor or a member of Parliament will definitely have a role to play over the water, electricity and roads in his area. At the moment, a developer has to pay capital contribution but when the project is finished, the service providers also meter out their services and the consumer has to pay or face disconnection.
To a lot of people, this appears to be paying double—the developer paid capital contribution to the service provider and yet the same provider is collecting through the meter. Why can we not just have the meters? So many people are asking. Try and apply for electricity connection to your house in Nancholi, Blantyre. The electricity supplier will first see if they can use an existing transformer. If not, they will ask you to bear the cost of a transformer and the poles and even the labour.
Usually, you have no say, as the choice is to have electricity or to stay in the dark perpetually. Even when one bears the cost of bringing a transformer, the service provider may take a long time to bring it, and you literally have nowhere else to complain, other than to the service provider. For water, it is much the same. People are being asked to pay for pipes and so on. I know of one project in Blantyre where, despite practical completion of a project, there is still no water nearly over two years down the line. This paper does not aim at criticising the service providers but rather to advocate change in the system.
One way would be to introduce competition among the various service providers, just like we have in telephone services. In other countries, the monopoly over distribution of water and electricity is long gone.
For roads, it is much the same. The service provider promises to take over roads, but they do not or but they do nothing. A number of people have complained about their roads, but nothing is done. I know of areas where residents have even refused to pay municipal rates until their roads are done. This is very unfortunate indeed as rates and the state of roads may not be that related and in any case, the charge for rates may have been arrived at after taking into consideration the state of the roads.
In a number of countries, water, electricity, roads, sewerage and many other services are the responsibility of the local assembly or authority. If this were the situation here, then it would mean the abolition of water and electricity organisation and placing that responsibility under the local council. This scenario might serve the public better than to have a regional board that is so big that it generates quite a lot of bureaucracy which makes it even less efficient. Malawi is perhaps the only country in the world where even a head of State has complained about the inefficiency of service provider.
The suggestion here may be rather unpalatable. But maybe time is ripe to change the system. It may be seen as a radical move now, but maybe things will be much better in future. The role of the present service providers may be restricted to generation and distribution to local council areas. The generation and distribution would be under supervision, of course. This is feasible. After all, we hear there are already changes in distribution of water and electricity. We need developers in Malawi, so let us be brave and effect changes to make the environment more amenable to developers.
Finally, the country needs more research on how building materials can be sold at a much lower price. The figure quoted at 55 percent is far too high. I would suggest that the two professional people should be requested to continue their research and find out how the country can reduce the current high cost of building materials.
In summary, there are two major things that the country needs to embark on in order to create an enabling environment for property development. One is to reform the relevant laws and the second one is to ensure that there is more research done on how construction costs can be reduced. The matter is very urgent and needs immediate attention of the relevant authorities.
—The author is a land economist and housing specialist. He is a chartered valuation surveyor, a member of the Chartered Institute of Housing, the Surveyors Institute of Malawi and the African Real Estate Society.
