“Some are skeptical”

One of the best sub-titles ever, in this case from the WSJ’s article named “In Nigeria, Wedlock Seen as Terror Fix: One Islamic City Tries Mass Weddings to Coax Single Men Into Peaceful Ways.”

Northern Nigeria has been wracked with violence from an Islamic sect called Boko Haram and the Kano State Hizbah (“a local bureau that implements Islamic law,” whatever that meansis getting creative.  The institution is funding mass weddings under the theory that good wives make men less interested in terrorism.

Policymakers who tried the same thing in India and Yemen might disagree.  So far 1,350 couples have been married so far in the last year and a half and there are more than a 1,000 scheduled for the rest of the year.  The policy appears to be popular as the waiting list is around 5,000 people.

So why are people so interested in having the government play matchmaker for them?  Well, for the men, the government pays the traditional dowry of $60.  The brides receive “a bag of rice, two crates of eggs, some cooking oil, a mattress, about $125 to start a business, and sometimes a sewing machine.”  They also get help in learning the Nigerian marriage basics are, which includes being able to “make perfume from local plants and to cook bite-size butter cakes.” Who knew?

As an extra enticement, the couple receives hand-sewn “flowing white Islamic wedding robes” and afterwards, a “chicken and yogurt lunch with the governor.”

Not all women are convinced; Faiza Iza argues that the mass weddings are unlikely to reduce terror.  She argues instead that it is just a “superstition to discriminate against unmarried women.”

How good are the institutions match-making skills?  The chairman of Reports and Documentation confidently claims that “It’s usually a match.”  That’s understandable after the government’s thorough questionnaire, which asks men (in all caps), “Do you want a tall and elegant girl? Fine?”

Not all of the matches seem to be totally on the up and up though.  For instance, police recently arrested 20 prostitutes and gave them the option of participating in a mass wedding or going to jail.  The new husbands shockingly weren’t informed of this.  Sounds like a match made in heaven!  The divorce rate in the region is around 50%, so what happens to terrorism when the marriages go sour?

Nigeria’s magic middle class

Interesting article from Reuters about Nigeria’s booming (and treacherous) property market advises selling to the “middle-class”.

But as far as I can tell, the numbers just don’t add up:

the top-end range is dominated by well established players and developers should target middle-income workers in major cities, such Lagos, Abuja and the oil-hub Port Harcourt. The most popular units fall in a price bracket of 20-35 million naira ($123,000-$214,100), developers and estate agents say.

Nigeria’s middle class make up around 23 percent of the population and earn around 80,000- 100,000 naira ($490-$610) per month, according to report by investment bank Renaissance Capital.

“If you know the market, the people, focus on middle class and cherry pick your deals, you can clean out,”

Is Reuters trolling us? Or are they victims of yet another Nigerian scam? Let’s break it down.

$600 / month = $7200 / year, so a $140,000 house would be 20 times annual income and a 214,000 house would be 30 times annual income.

YIKES!

So a 10% downpayment would be two years income at the least? For this to work, mortgages must be cheap and easy, right?

there remains a problem with that huge latent demand. No mortgages. Unless you are willing to pay a 25 percent interest rate.

The mortgage debt-to-GDP ratio in Nigeria is under 0.5 percent, compared with 72 percent in the U.S. and over 30 percent in Malaysia and South Africa, government figures show.  

Never mind.

So developers can get rich by selling to people who can amass 20-30 years of annual income in personal savings? Good luck with that strategy. I’d hazard a guess that selling to the rich, to foreigners, to government, and to foreign firms is still the path to big money in the Nigerian property market.

PS: there is another great line in the piece: Nigerian banks don’t like giving out mortgages, which for clarity I think should have “to Nigerians” appended at the end.