Ayo Ibaru: Investor Protection, Legal Framework Form Linchpin For Foreign Real Estate Investment

The Chief Investment Officer of Pantera, Ayo Ibaru, says investor protection and a predictable legal framework remain critical to attracting foreign investment into West Africa’s real estate market.

Speaking during an interview with ARISE News on Monday, Ibaru said while economic activity is an important factor in assessing real estate investment opportunities, investor protection and the legal framework are particularly significant when considering foreign investments.

“But in the end, and maybe more to your point, the protection of investors and the legal framework is really the linchpin, especially when you’re looking at, uh, foreign investments.”

Ibaru said the assessment was based on the Real Estate Investment Attractiveness Index developed by researchers Lieser and Groh in 2011.

He said the framework, which analysed 66 countries, identified six elements used to assess real estate investment attractiveness.

“Now, what you want to do is understand the index as a holistic framework.”

Ibaru said economic activity generally carries significant weight because of its impact across the other elements of an investment environment.

“Economic activity is generally touted as the, uh, more important one, and that’s because of the heft that it brings to every conversation.”

He emphasized that legal protection becomes particularly important when foreign investors are considering where to commit capital.

Ibaru pointed to Cabo Verde as an example of a country that has prioritised creating a predictable legal environment to attract foreign investment.

“So what they have decided to do is be the most predictable legal environment.”

He said Cabo Verde has reorganised its laws and investment processes because of the importance of foreign investment to its tourism-driven economy.

“They are largely a tourism destination country. And so they’ve realized, in short order, that if they don’t make processing of permits efficient, if they don’t deal with how laws are written and how investments are put together and given to the public, it will be very difficult to sustain the very economy upon which the country itself stands.”

Ibaru stated that the approach had helped Cabo Verde maintain its position in the assessment, noting that the country had also performed strongly when the report was produced in 2023.

“And it’s the same thing we did see when we did this report in, uh, 2023.”

Turning to Nigeria, Ibaru said the country’s large economy and population provide significant opportunities for real estate investment, particularly in Lagos and Abuja.

“When you’re looking at West Africa, it’s almost a no-brainer that Nigeria will be the largest by sheer size.”