On June 02, 2021, the Addis Ababa City Administration inked a Memorandum of Understanding (MoU) with Property 2000, a South African firm that claims to be a real estate agent, to construct 500,000 houses in Addis Ababa in five years period. They agreed that the company would construct half a million housing units in the city with 4.2 billion US dollars. It was announced that the full cost of the construction of the houses will be covered by Property 2000 and the city administration will provide the company with construction sites along with the necessary infrastructures and grant the company a duty-free privilege to import inputs.
Is it 4.2 Billion Birr or US Dollars?
Different media outlets reported the budget differently. Some said it is 4.2 billion US dollars and some of them stated that it is 4.2 billion Birr. Fana Broadcasting Corporate and Borkena reported that it is Ethiopian Birr while the Ethiopian News Agency says it is US dollars. Adanech Abiebie, Deputy Mayor of Addis Ababa announced that it is 4.2 billion US dollars.
The budget seems exaggerated. The budget, 4.2 billion US dollars is almost equal to the initial project value of the Great Ethiopian Renaissance Dam (GERD).
The MoU was signed by Adanech Abeibei, Deputy Mayor of Addis Ababa, and Napo Eddie Modise, Chairperson of the company. The company chairman promised to hand over 100,000 houses within a year. During the ceremony, the deputy mayor said that the houses will be handed over to low and middle-income residents with loans at a one percent interest rate to be paid in 30 years.
The Deputy Mayor tweeted, announcing she signed the MoU with the South African company for the construction of half a million houses. However, the tweet by the Deputy Mayor Adanech Abiebie was deleted from Twitter for unknown reasons. The news still remained published on other media outlets.
Who is Property 2000?
Property 2000 claims it has secured several major lucrative developing projects with funding supplied by International and local funders. But only very little is known of the company’s background and track record. According to the South African Companies and Intellectual Property Commission (CIPC) portal, Property 2000 was registered in 2018.
Last year the Lesotho Ministry of Finance canceled a loan deal with Property 2000. The Ministry and Property 2000 signed a deal that the latter would lend 2.45 billion South African Rand to finance the construction of sports facilities. It was reported that Property 2000 didn’t have the money but to source the loans from Grissag AG, an investment company based in South Africa.
The Lesotho Ministry of Finance broke the loan agreement due to suspicious linkage of Property 2000 to Grissag AG which has a contagious credit history. Grissag AG has been involved in many shady contracts.
The Public Debt Management Directorate of Lesotho hasn't given detailed information about its previous projects to prove the capacity to fulfill the contract. The Directorate concluded that the company has no credible previous projects. Khotso Moleleki, Lesotho Public Debt Management Director said that the company talked about projects in Malawi, DRC, and Ethiopia, but all the information was sketchy and no successfully funded projects could be traced.
The director of Property 2000 Modise responded to the allegation, refusing the claim by the directorate.
The website of Property 2000 is incomplete and seems made in a rush. It doesn't have detailed information about the background and track record of the company.
On June 8, 2021, the Addis Ababa Housing Development and Administration Bureau gave a press briefing about the framework agreement with the South African company. The Bureau said that the allegations regarding Property 2000 are unfounded and the agreement was signed after it proved the track record of the company. It stated that the company has over 31 years of experience in the sector.
The housing shortage has been a major problem in the city for a long time. In the capital alone, over 650,000 residents have been registered so far and are waiting for condo houses. The government has been projecting many schemes in a bid to solve the shortage of houses by constructing condo houses, including the 20/80 condominium project launched in 2013.
Three years ago the Addis Ababa City Administration and Prime Minister Abiy Ahmed (Ph.D.) inaugurated a 56 billion Birr housing project to be built in the Leghare area. The construction was given to a Dubai-based company, Eagle Hills.
It was announced that the project was expected to be completed in two years. But not much about the status and progress of the housing project is known even three years later.
Deputy Mayor Adanech Abiebie in a long article posted on Facebook on June 9, 2021, criticized the allegations and backlash against the project. She announced that the government has got evidence that reveals the company has many years of experience in the real estate development sector in South Africa, Zimbabwe, Ghana, Nigeria, and many other countries and has opened a new company, called ‘Property 2000 Ethiopia’ in Ethiopia.
Representatives from the Addis Ababa City Administration did not respond to an inquiry from Haqcheck until this analysis was published.