Ghana has 1.6 million housing deficit, but policies still in draft since 1983

HousingIt doesn’t seem clear, how Ghana can tackle its housing deficit which is said to be currently at 1.6 million though there is high demand for houses by individuals in the country.

Different versions of the country’s housing policy are said to be in draft since 1983.

Vice President John Dramani Mahama in an interaction with the leadership of the Ghana Real Estates Developers Association (GREDA) in September 2009 at the Castle said the country’s housing deficit is at one million units.

Mr. Mahama has indicated that approximately 60% of Ghana’s national requirement in terms of housing remains unsatisfied.

Some experts believe that to resolve this socio-economic problem, land acquisition and finance will be the answer. Others believe a proper mortgage system is the overall trick with the rest saying manufacturing of housing products should be done locally instead of importing them.

Implementation of continued housing policies on the part of government has not been forthcoming, as government lacks the political will to do so.

According to a Ghana News Agency publication of March 29, 2011, the country’s housing deficit is likely to double within the next ten years citing a public data on shelter.

The publication further said Mr Akwete Akita, Executive Director of HFC Bank, who made this known, expressed dissatisfaction that though high demand for housing existed in the country, it lagged behind in addressing the challenge.

The State Housing Company (SHC) and the private sector combined are said to be delivering 25,000 new housing units onto the market each year but that looks like a drop in the ocean as calculations show that if there is a deficit of 1.6 million houses which need to be solved in the next decade,  housing production must increase from 25,000 to 160,000 a year.

Facts available indicates that in all the years of its existence, SHC has build just 150,000 housing units in total, less than 5% of all houses in Ghana.

“Not a single national housing policy has made it through Parliament since 1983 and that year after year successive governments have stumbled from one draft policy to the next, and the current government is no exception. After three years in power, their policy too is still in draft form.”

But government has indicated that it is committed to solving the challenge. The Minister of Works Housing, Alban Bagbin has promised to address the housing deficit within the next year.

Vice President John Dramani Mahama in his meeting with GREDA announced that government is to formulate a strategy on the real estate sector to tackle a national housing deficit.

But a documentary produced by Channel Two Communications showed to stakeholders in Accra on September 5, 2011, reveals that “Not a single national housing policy has made it through Parliament since 1983 and that year after year successive governments have stumbled from one draft policy to the next, and the current government is no exception. After three years in power, their policy too is still in draft form.”

In an interview with Mr. Asare-Akuffo, CEO of HFC Bank shown in the documentary, said a comprehensive government policy could take 20 years to implement and must by its nature transcend political parties. “Government after government has to implement it. But is not what’s happened here.”

At a discussion forum, Mr Torgbor Mensah, Founder and also Past President of GREDA blamed the problem on lack of continuity of policy implementation.

Mr. Torgbor recalled that during the PNDC regime which helped form GREDA, local estate developers met with the government of the day and told them (government) that they want to build houses for the country with no intention of making profits.

Even though the local developers were not financially sound, according to Mr Torgbor, they asked government to provide only land and finance. Government provided the funds and they delivered the houses.

“If you go to East Legon, Dzorwulu and Airport Residential area, which foreigners came to build it for us? We built it. Land and money is the way out.”

But when there was a change in government, that policy came to an end, Mr Torgbor said.

Mr Edward Effah, Managing Director of Fidelity Bank in the documentary said, “I don’t think that funding is an issue, and we will say this over and over again. Banks want to back projects where there is the reasonable likelihood that they will get their money back.”

Adding his voice on the issue of funding, Mr Joseph Aidoo Jnr, Executive Director of Devtraco Plus Ltd, an estate developer noted “But I also think the banks are not willing to take the risk of giving these funds for scalable projects to developers.”

“If you are dealing with a $50 million project and you are required to provide 30% equity – $15 million, that’s huge amount for Ghanaian developers to come up with,” Mr Aidoo added.

Land litigation or buying is a major hinderance in building more houses.

Statistics show that 80% of the country’s land are customarily owned by traditional authorities (chiefs) and sometimes before one gets a land free from troubles, you might end up paying more than three or four persons especially in regards to stool lands.

“The land title problem has bedeviled our country for years, when you buy land in Ghana, you don’t even know what you are buying, and that is a recipe for disaster,” said Real Estate Consultant, Mr. Peter Tsikata

But Dr. Odame Larbi, CEO of Lands Commission says his hands are tied.

“Outside of Accra and Kumasi, there is no law,” he says, “that compels the people to register their lands. So when you come to the Lands Commission, it is those who have chosen to register their lands that we have records on. If the person has not registered his land, we have no information at all on such lands. The Constitution says that the management of all Stool lands shall be by the appropriate Stools in accordance with customary law and usage. So they manage their lands and the Commission records what they grant.”

“So if the chief sells the land and another person either from a different Stool or another faction within the same Stool begins to sell the same piece of land, the Lands Commission has no mechanism for stopping that because we don’t own the land” adds Dr Larbi.

However, a development that initially looked like a viable solution to address the housing needs of the country, was the public-private partnership between the government of Ghana and STX Engineering and Construction Company of Korea involving $1.5 billion to provide 200,000 houses for decent accommodation for more than 70% of Ghanaians who cannot afford to buy or build their own houses.

But board room wrangling between the Ghanaian and Korean STX counterparts put the brilliant housing project into jeopardy.

By Ekow Quandzie

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