Illegal land allocation distorts markets
PHILLIMON MOLAODI
8/27/2004 2:34:32 AM (GMT +2)
GAOTLHOBOGWE Motlaleng, a University of Botswana (UB) lecturer who specialises in macroeconomics, has said that illegal land allocations can distort the actual pattern and performance of the markets.
“In economics, we assume that markets are perfect but going by the Lesetedi Commission, I doubt if that is the case,” he told Mmegi recently.
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Motlaleng was reacting to a Southern and East Africa research report by Knight Frank that covered Botswana, Malawi, South Africa, Zambia, Zimbabwe, Kenya, Tanzania and Uganda. The report cast doubt over the survival of the recently mushrooming shopping complexes in Gaborone. “Until recently the fragmented nature of Gaborone’s retail facilities meant there was unquestionable demand for a regional shopping centre. However, the construction of five shopping centres; Riverwalk, Game City, Molapo Crossing, Westgate Centre and Fairgrounds Mall within a year .... is likely to prove excessive for a small city,” the report noted.
Motlaleng said if land was acquired on a silver platter, there are high possibilities that there would be no value added to the economy.
“I assume the investors have done a feasibility study on the supply and demand of the local population taking into account the income levels of the people. However, if they have not bought the initial land, I doubt there would be value added. There must be value for what they attach on their capital,” he explained.
Motlaleng also cast doubt over the survival of the complexes, noting that “they are not diversified even though they claim to be. The shops in all the complexes sell the same range of products,” he said.
Because of lack of diversified products, other retailers are bound to be affected by congested malls selling the same line of products. “Existing medium - sized retail developments, such as Kagiso Centre, may well suffer as a consequence of the abundance of stock available. However, small - scale convenience facilities are expected to continue to trade well,” said the report.
Previously, other economic commentators were opposed to the construction of the malls citing the same fears contained in the Knight Frank report. It is still questionable as to why the construction of the malls was rushed ahead of the proposed Central Business District (CBD), which coincidentally happens to be lagging behind by about two years.
The population of Gaborone is estimated to be around 300 000.
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