SPECIAL REPORT ON HOUSING

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Good times ahead for housing?

By Special Reports Team In the last few months of 2020, the issue of housing leapt to the front pages of the newspapers.

First was the announcement in August by the Vice President, Dr. Mahamudu Bawumia, of plans to introduce a national rental assistance scheme in President Akufo-Addo's second term. Then, in late October, the President inaugurated a 204-unit housing estate at Ashaiman, one of the largest towns in Greater Accra. Two weeks later, the Social Security and National Insurance Trust—the state pension fund—opened another estate, comprising 1,027 homes, in Asokore-Mampong, a suburb of Kumasi. These developments came amid a declaration by Ken Ofori-Atta, the finance minister, that the government will make housing a priority during the next four years.

The task is mammoth: according to the Ministry of Works and Housing, Ghana needs 2m new homes now, with housing needs rising with population and urbanisation expansion, increasing incomes, and shrinking household sizes.

As building of homes, especially the low-cost or “affordable” type, has failed to keep pace with these changes, the pressure on existing housing has multiplied, exacerbating the problems of overcrowding, deterioration of dwellings, overstretched infrastructure, and urban sprawl.

Fifty-seven percent of Ghanaian households live in a "compound house", where they share facilities like bathrooms, toilets, running water, and electricity with other households. Many compound houses even lack these basic amenities, leaving residents to

rely on nearby public facilities.

The grimness of housing conditions is also shown by the fact that almost half of all singleroom dwellings are occupied by households with at least three members.

Such congestion became a concern during the outbreak of Covid-19, since it made it impracticable for many people to observe public-health guidelines on physical distancing, self-quarantine and isolation intended to contain the spread of the disease. As in other aspects of people’s lives, the pandemic threw into sharp relief the need for better housing to improve the health and wellbeing of the population.

Despite persistent political rhetoric about fixing the housing crisis, the state has largely done a poor job of boosting housing supply or facilitating homeownership. Several public housing projects were started in the past but not completed; some were loudly publicised but never even got off the ground. The recently-completed Asokore-Mampong estate, for example, was begun in 2006 by the state but neglected for more than a decade before its revival by the Social Security and National Insurance Trust in 2018.

Other similar stories abound: a government housing project at Borteyman, in Greater Accra, remains unfinished 15 years after commencement, while a 5,000unit development at Saglemi, also in Greater Accra, which was supposed to be ready by 2017, has been in limbo for the past four years because of a dispute between the government and the contractor over the scope of work and cost.

The private sector has been doing its best to fill the gap.

Most private supply comes from individuals who build their own homes.

Self-building allows people to build according to their preferences, lifestyle and budget, but because of insufficient savings, most of them build their houses in dribs and drabs. The average self-built house probably takes a few years to be finished.

Moreover, a lot of these houses are built in unplanned settlements or do not conform to building codes, meaning such additions to the housing stock do not necessarily enhance the overall standard of housing or create better living environments.

Housing accompanied by respectable living environments is what private developers typically provide, through their gated communities, apartment complexes, and upscale residences. With new construction sprouting up all over the capital city and its mushrooming neighbourhoods, it is easy to forget the hurdles developers must scale to start a project. Affordable finance is a rare commodity in the country, with bank interest rates ranking among the highest in Africa. A malfunctioning land market, absence of basic infrastructure in some places, and heavy dependence on imported inputs are among the constraints developers grapple with. These issues have an outsize effect on house prices, which have hit mad heights in most cases.

Besides, demand for the homes built is restricted by workers’ low incomes and a poorly developed mortgage market.

The government has intervened

freshly through the National Housing and Mortgage Fund (NHMF), which was established in 2018 to address what officials say is "a failure of the housing market." Using the resources of the fund, the National Housing and Mortgage Finance Initiative (NHMFI) has been introduced to reconcile the supply and demand sides of the market by simultaneously stimulating affordable home-building and affordable mortgages.

The Ashaiman estate is a product of the initiative, which is providing subsidised mortgages via partner banks to buyers. A rent-to-own scheme targeting low-income government employees has also been launched as part of the initiative. The goal is to spur the development of 200,000 affordable houses by 2024.

Private developers and investors have generally greeted the government’s intervention with interest but not excitement, as the interviews published in this Special Report reveal.

Although they acknowledge the contribution the NHMFI is likely to make, they contend, rightly, that a wider array of policies is needed to fix the root causes of the housing market’s inefficiencies.

The lesson afforded by countries which have achieved high homeownership rates is that the role of government is fundamental to unlocking mass production of affordable decent housing with liberal access to finance to purchase them. It is to be hoped that the current initiative will catalyse reform in other areas to help make homeownership a reality for many, not a few, within a reasonable space of time.

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Vox Pop: Views on affordable housing and rental costs In this Vox Pop, we sought the opinion of the public on housing issues and got some intriguing responses.

Atutonu Sefakor

Martin Elorm Dogbo The definition of affordable housing seems not to cover the average Ghanaian. If it was that affordable to many, landlords would not be bullying tenants financially by asking them whether they know the price of cement bags, land, iron rods, etc.

This affordable housing luxury can only be enjoyed by those who earn GH¢6,000 upwards. This is like a combination of the gross salary of three or four average Ghanaians in the teaching and nursing professions.

Ekow Skare Annan

Juliet Ahiagbede

Man saves for like a year or two and has to hand it over to a landlord who will always look for an opportunity to increase the rent, with or without major renovations. On the intervention scheme by government, even though it's belated, I think it's still a step in the right direction and just hope everyone gets to benefit, not only those with party tags. In our part of the world, the term "affordable housing" isn't applicable to the average earner because how on earth will you price such houses in dollars and still describe them as "affordable?"

When renting an apartment, you are exchanging money for a place to stay. But tenants are treated as if they are being done a favour by their landlords.

This is to say, there is a lack of professional and business relationship between the tenant and landlord.

Kwasi Mawutor My experience with renting in Ghana is chaotic. You have to pay agents who'll show you something different from what you asked for, even sometimes show you places where they know the accommodation isn't available. It can be more difficult than getting a US visa.

I don't trust government to be able to implement its policies on rental schemes. It might just be an enterprise to line the pockets of people who'll manage the scheme. It should be able to implement the maximum 6 months’ rent advance first, then it can convince some of us of being able to do new and better things.

None of the so-called affordable government housing is affordable to the average worker. Perhaps the affordability is about what is affordable to senior government officials, not the rest. It's more affordable to buy your own land and build than to rely on so-called government affordable housing.

Henry Rhule

Kenny Kwabena Senaya Myles Jay Iddy Government cannot intervene in rental issues unless it has the majority of the homes, just like the UK does it—council homes.

So it can attempt to call the shots, but the private man decides how he wants it because he is looking for money in the shortest possible time. Affordable homes of government aren't affordable.

How do u sell a single-room apartment for GH¢97,000 and you call it affordable? (SSNIT affordable houses on the motorway). The painful part is they want 70 percent down and the rest paid within 3 months.

Accra has a close to 2 million housing deficit that grows exponentially by 7 percent annually. How does government want to solve it? By controlling rent issues or building fast modules that can curb the issues? We should get it right.

Affordable housing that the regular Ghanaian who earns around GH¢800 cedis cannot afford? In fact, it's being sold in dollars. Most are sold out to the rich even before completion.

On the rent and affordable housing debate, personally, I had to dedicate three weekends to search aggressively before I got my current place. If you dare to reside close to work, the rent alone can unmake you financially. Staying far away too is trouble since the rent may be affordable but transportation will take a toll on you. Rent is extremely high in Ghana and this is very worrying, especially to young folks who are about starting life. For me, the rent assistance promise by the government is not sustainable.

Affordable housing should be discussed extensively with key stakeholders. Some tax exemptions and an enabling environment will also help house builders to reduce cost, which will favor the buyer. We all pray for a period when a young family can access a housing facility at lower mortgage rates.

Rent in Ghana is largely affordable considering the cost that goes into building residential housing. The challenges with rent are largely low incomes.

A. Low incomes make it difficult for people to save for rent.

B. Demand and supply forces – demand usually exceeds supply, and that naturally affects the cost of rent.

C. Rent law implementation – lack of proper implementation makes room for landlords to exploit the system with rent advance, wrongful evictions and rent increases.

D. The national rental assistance scheme would represent some form of low or interest-free package to help persons who are not in the position to save towards the rent. It’s a good credit system for those who will benefit from it.

E. Affordable housing still falls on the issue of low incomes and inflation. The affordable housing schemes we have in Ghana are relatively expensive, even for middle-income earners.

Location is also a factor, as these are centred in few locations in the country out of reach of active users and interest groups.

F. The state has to consider multi-storey state housing for civil/public service personnel that would not be sold to them, as has been happening, but would be issued and reissued as and when they retire, resign, or relocate. This will get that burden off the shoulders of a big section of Ghanaians.

One trick is clear: when there are good transport systems (rail, road, etc.), people can live far away in low rent towns and still commute to work daily in the busy cities where rent is relatively expensive to them.

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How can we fix the housing challenge?

Interview Samuel Amegayibor Executive Director of the Ghana Real Estate Developers Association (GREDA) How would you assess Ghana's housing situation at the moment?

Samuel Amegayibor: I think the popular word when it comes to housing in Ghana is deficit.

The situation now is that we have a very huge housing deficit.

As at 2010, we were told it was 1.7 million, and if we needed to confront the deficit over a period of 10 years, then we should be delivering around 200,000 units annually. But obviously we’ve not been able to do that. I think delivery is around 45,000 units or so annually.

So, over the years we have accumulated more deficits, and as at last year we started hearing from the Ministry that the deficit was hitting over 2 million.

In terms of the market itself, private developers are doing their best to supply houses on the market, but the general populace complain that the houses are not affordable. So that’s where we are. Businesses or private people

are not charity organisations, so whatever costs they incur, they will pass it on to the consumer and put their profit margins on it.

So that’s basically where we are.

What are the major constraints to bridging the housing deficit in the country?

Samuel Amegayibor: With the housing situation, there are two sides to it: the demand side and the supply side. The demand side refers to the consumers and buyers or prospective home owners. Basically, they have a challenge with how to raise money or their purchasing power is not meeting what the market supplies. So there’s always that disconnect between what’s really needed and what’s available on the market.

Assuming somebody even gives

us free money to be supplying houses on the market, who and who are capable of purchasing?

That means that apart from the deficit, one has to establish the effective demand. Unfortunately, however, we have not conducted any study on that, but I can say that the percentage of the Ghanaian populace who have the purchasing power to buy houses currently is very small.

We had a conference with stakeholders around Africa and a Nigerian professor said that in West Africa, the proportion of people with the purchasing power to buy houses is just about 13 percent, whilst over 60 percent have the ability to rent if decent accommodation is made available. But they also don’t get it.

The remaining percentage relates to the low-income class people, those who need to be helped. They can neither rent nor buy, so they need some kind of social intervention from the state to provide them some form of accommodation, either for free or to rent at heavily subsidised rates to meet their expectations.

To what extent is finance a constraint, in terms of private developers' ability to obtain funding for projects, and also in terms of potential homeowners' ability to obtain mortgages?

Samuel Amegayibor: The demand side cannot access mortgage products that can meet their circumstances. Mortgage rates are too high for the ordinary individual to afford. Apart from that are the qualification criteria.

How many working-class people can afford or qualify to take a mortgage? It’s just a small minority. They say in Ghana the mortgage penetration is just about 1 percent, which is just terrible and shows that we are not doing well at all.

On the supply side, the developers have numerous challenges, starting from land acquisition. We all know issues with registration bureaucracy and double or triple documents on the same piece of land. The disunity among land owners, families, and chiefs makes acquiring land a big headache.

Access to finance is the second major issue. If you even access the funds, the cost is too high and it is not long term. But with our kind of business, you need long-term funds. Also, because of land litigation issues, sometimes we get projects stalled or halted in the middle of development.

When that happens, the lender would still be waiting to collect his money with interest, but the developer cannot continue the project.

Again, according to the Nigerian professor, for the same design

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and the same type of land, you would save 30 percent of the cost if you build in Nigeria compared to Ghana.

Then, when it comes to estate development on outskirt lands, you are constrained by access to basic infrastructure. Connecting road, electricity, water and other amenities comes at a great cost.

Sometimes buyers presume that they are just buying the housing unit without considering the costs of acquiring the basic amenities, so they think the house or unit is expensive.

Developers don’t get any form of help from the state in this area. Elsewhere, some of this basic infrastructure is provided before the developers begin development. Over here, most of these things are done by ourselves. However you look at it, the consumer is going to pay indirectly.

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Finance Initiative (NMHFI).

What is your assessment of the government's effort to address the housing challenge?

Samuel Amegayibor: Like I already stated, on the demand side, one of the challenges is access to cheap mortgage finance, so this initiative is good because from what I understand it is heavily subsidised. The arrangement is that the state is giving some monies to particular banks for the pilot. Whatever the amount that is given to them, they are supposed to double it to dilute the interest. So whereas currently, on the open market, you may get a mortgage at around 24 percent, you can get this one for between 12 and 13 percent.

But it is now only available to the public sector.

It has its challenges as well.

What is happening is that there’s a price ceiling that they expect developers to build the houses under, meanwhile the developers didn’t get any support. They built on their own and paid all the expenses. So the price ceiling on

the houses is not easy to meet.

Most of the developers do not find it attractive, so they are not even bothered to participate in it.

Government hasn’t taken any steps on the concerns of developers. They expect the developer to build specified units of houses so they come and write the mortgages for people who can afford. But how the developer can build that house to meet that price is where the problem is.

You can find developers who are struggling to sell their houses but are not bothered about the government’s initiative because it has not been properly structured.

Even for the public sector workers, who are supposed to go in for the facility, we are not seeing much action there because there’s little on the market for them to take.

The last time we had a discussion on it with some of the banks that are handling this project, per their analysis, if you are a public servant and you go for a GH¢140, 000 or GH¢150,000 facility, you should be earning around GH¢3,100 as take-home

salary.

Only the top-level officers can afford, but they too don’t need one- or two-bedroom houses. So you can see the mismatch. The product design and the tariff need to be fine-tuned.

What policies would you like to see to enable serious inroads to be made into the housing problem?

Samuel Amegayibor: I think we haven’t been doing much; we’ve been doing a lot of talking, but we don’t take the measures that are needed to actually confront the challenges. Even if we do it, it’s more of surface dressing instead of going deep down to look at short-, medium- and long-term approaches.

We also have a problem with continuity; we take decisions to do certain things but we don’t follow through. Politicians want projects established in their name and so want to rush decisions which are tied to their time of administration. The housing problem needs a long-term approach.

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Government needs to do more for the supply side, says Devtraco GM

As the government places housing front and centre of its policies for the next four years, the supply side of the challenge needs more attention even as demandside solutions are designed, says General Manager of Devtraco Limited, Alfred Agyena.

Devtraco is a household name in Ghana’s residential property market with almost three decades’ experience under its belt. It has developed some of the most breathtaking housing communities within the capital city and its environs, providing numerous families within the country and from the diaspora with their dream homes. The company has sharp insights on how the housing sector has evolved over the years and what is required to accelerate housing supply and homeownership in the country.

Mr. Agyena points out, to begin with, that the housing deficit is worsening because not enough homes are being built to satisfy the growing need for housing.

“Averagely, the country needs to provide about 100,000 housing units annually to accommodate the average population growth rate of 2 percent. But here is the case where the average supply is about 40,000 units, which means that we are accumulating deficits each year,” he says. He adds that between five and seven years ago, the housing deficit stood at about 1.7m units, but that figure has now doubled.

He agrees with others within the sector who feel governments through the years have not shown adequate commitment to tackling the housing challenge.

This has meant that most of the constraints to bridging the housing deficit have not been addressed. These include land and infrastructural issues, the high cost of finance and of construction, lack of investment incentives to encourage private developers, and poor functioning of the mortgage market. In addition, government pledges to improve the situation have not always materialised.

Although Devtraco has been braving out the challenges, which explains its large investments in housing development to date, the constraints continue to hinder the efforts of investors to rapidly increase housing provision. “For example, obtaining finance for huge projects is very difficult. This is because you need significant collateral, which could be difficult for some developers to obtain.

And even if a developer comes up with the needed collateral, the single-obligor limit restrains the size of the facility the bank would give. Our next project, for example, is expected to cost us about US$300m, which is beyond the limit of our banks,” Mr. Agyena elucidates.

The government’s current intervention in the housing market through the National Housing and Mortgage Fund has caught the eye of private developers, but the scope of the intervention has to be widened to encompass all aspects of the problem, the General Manager continues. He describes the National Mortgage and Housing Finance Initiative, through which the Ministry of Finance is collaborating with a number of banks to provide subsidised mortgages to the public, as a very good intervention which is intended largely to solve the demand-side issues. “However, the housing problem is about both supply and demand, and we need more interventions on the supply side in order to close the deficit we currently have in the country,” he stresses.

Regarding additional policies to help reduce the shortage and cost of housing, he says the government should quicken reform of the land market to ease access to land and the registration of title, which remain difficult despite recent digitisation of land registration services.

Since developers

often provide infrastructure themselves when they develop their projects, the government could extend tax concessions to them to offset their spending on infrastructure, Mr. Agyena recommends.

Furthermore, policies to reduce the cost of capital would be extremely helpful. These steps would incentivise new developments and ultimately help to reduce the cost of houses, widening access to a greater number of people.

On the cost of houses, which is driven by high cost of production factors such as labour, land and materials, a sustainable solution could be achieved, according to the General Manager, through policies that would ensure that most of the inputs for building are manufactured in the country.

Currently, most of the inputs are imported, made worse by the tendency of the exchange rate to be unstable, which raises import costs. Without corrective policies, he says, the situation would remain the same.

In designing interventions, policymakers should remember that the housing problem cannot be fixed by government alone, Mr. Agyena underscores. As such, initiatives to boost both public and private housing delivery at affordable prices must be pursued. “So far as dealing with the housing deficit is concerned, it should be a collaboration between the government and the private sector,” he says.

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Interview Louisa Afriyie Boateng Business Operations Manager of Earlbeam Realty How would you assess Ghana's housing situation at the moment?

Louisa Afriyie Boateng: The current situation with housing now is one that definitely needs attention. From a developer’s point of view, there are many of us who are providing housing, but it’s noticeably clear that there is a gap between the classes, and definitely a gap with regard to financing and affordability.

So this is a very apparent situation that we have all noticed, and hopefully, throughout this year and the coming ones, there will be initiatives and different measures and mitigation to remedy some of the solutions.

I know as developers, we are looking into that gap, by selling in areas which are still centrally located and attainable for the middle income class.

The housing issue is a problem that has escalated over the years, and it’s something that will not be fixed overnight, but I think it first starts with the recognition. And when something gets recognised, then we are able to pinpoint how to go about addressing it.

The housing deficit has climbed because the population is growing and economic factors also come into play. One obvious one is the pandemic that we are faced with at the moment, which has changed a lot of people’s financial circumstances and will affect their ability to afford housing or improve their housing conditions.

To your knowledge, what are the trends in housing supply/delivery by both government and the private sector?

Louisa Afriyie Boateng: I will talk about the government first: there are schemes and initiatives, but I feel some of these schemes and initiatives are still bracketed within certain classes. I see a lot being done by the government to make homeownership more attainable. However, there is still a big gap with those everyday working people who do not have the finances to take themselves

out of the poor housing they presently occupy.

So yes, there is the willingness and ability of the government side to try and mitigate some of these issues. But when we go to the private side, the complete contrast is that there are a lot of developers who, even though there is a need for affordable housing, operate in the luxury segment, which sometimes prices out the day-to-day Ghanaian person but attracts expats.

Nevertheless, there’s nothing wrong with that, and I also want to add for clarity sake that affordability is relative.

This situation is no fault of any property developer because building items are imported and land litigation is still a huge issue in Ghana. If there were initiatives in terms of finance, grants, and loans given to the developers, the uptake would be much better, giving developers an opportunity.

House prices in Ghana are considered to be excessive. What is your response to this, and how can prices be contained to increase access to homes?

Louisa Afriyie Boateng: I think the mitigating point for this question will be changing

the way things are done from the developers’ point of view. I think that if there are different ways by which one can achieve home ownership from a private developer, in regard to flexibility in terms of payment or maybe having some sort of plan, like a rent-to-own sort of facility, it will make the conversation a lot more upbeat and make the working class and everyday Ghanaian family feel that they can also attain home ownership.

And from the government point of view, there are, I believe, initiatives that can be rolled out to support the everyday Ghanaian when it comes to home ownership. However, factors to be considered, in my opinion, include location, since one always has to consider where they would live in relation to where they work.

The government has placed housing high on its agenda for the next four years and has announced policies such as the National Mortgage and Housing Finance Initiative (NMHFI).

What is your assessment of the government's effort to address the housing challenge?

Louisa Afriyie Boateng: In my

opinion it is a great initiative; it is one that gets the conversation on housing going and makes the issue very real. I presume that it’s going to make working-class people have a goal and plan to work towards, and even start to have conversations within their families. So it’s a very good and positive thing, and I’m sure that as things progress, we’ll learn about it in a lot more detail.

What policies would you like to see to enable serious inroads to be made into the housing problem?

Louisa Afriyie Boateng: Housing issues should be looked at in a more holistic way—that is, looking at it from all sides of the fence. When that’s done, one gets to put themselves in the shoes of all persons or stakeholders, and then the right policies can be implemented to mitigate the gaps.

If you only take one point of view or class, you only get one position, but if we can have a 360 view, we would be able to form a better consensus. The NMHFI initiative that’s been rolled out to support mortgages is just one of many different schemes that could be birthed by looking at this issue from a holistic point of view.

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Earlbeam’s Fairfax contemporary townhouses, East Legon Hills Located in the serene East Legon Hills, Accra, Earlbeam’s Fairfax Community offers the modern family a chic stylish living space.

The 15 four-bedroom detached and semi-detached contemporary houses have high-quality finish inside and out as well as the convenience of nearby shops, restaurants, cafés, schools, etc.

Offering wonderfully lit and wellproportioned living spaces within a

private gated community setting in a quiet corner of East Legon Hills; the Fairfax Community is a hidden gem for you to discover.

This development is a minute’s drive from Melcom, British International School, the newly proposed East Legon Hills Mall and other amenities.

A four-bedroom detached townhouse which is available for US$155,000 is fitted with 24-hour back-up power, 24-hour-

security, fully-fitted air-conditioning units, back-up water supply, a children’s playground, a swimming pool as well as a gym.

The property also comes with a flexible payment plan. First, one has to make a deposit of US$5,000 and thereafter a 20% deposit. The rest of the payment plan can then be structured around what works best for the client.

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Devtraco Courts by Devtraco Limited Our current project, the Devtraco Courts at Tema Community 25, is the biggest master-planned residential community in Ghana. It is developed on an acquired land area of 205 acres and currently

has over 1,300 units. The Devtraco Courts has different clusters consisting of 2- and 3-bedroom detached and semidetached houses, 2-bedroom condominium-type apartments, and our luxurious 4-bedroom

houses. In addition to the clustered homes, Devtraco Courts has great amenities to keep you and your family safe and comfortable. The amenities comprise a recreational area, kids’ playground, police station,

fire station, Go-kart racetrack, clubhouse, a school, eateries and swimming pool. Join our safe, secure and serene environment in the biggest master-planned residential community. Book a viewing of any of our properties.

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Interview Cyril Nii Ayitey Tetteh Executive Director of Yecham Property Consult

How would you assess Ghana's housing situation at the moment?

Cyril Tetteh: I would say the market is at a transitory point with a rethinking of the traditional modes of business and housing delivery due to the impact of COVID-19. The pandemic has significantly impacted activity within the real estate sector and the market players are finding innovative ways to develop new business, beyond business as usual. A critical look at the various sub-sectors indicates a changing landscape as follows: Residential: The situation in this sector is an interesting one of adaptability. While there seems to be an excess supply over demand at the high end of the market (luxury apartments and townhouses in prime areas mainly), the low to mid end of the market (single storey or bungalow-style houses) is still very much vibrant, as a large chunk of the national housing deficit, estimated to be over 2 million units, is located within this end of the market. Developers at the high end of the market are increasingly developing smaller units of studio, 1-bedroom sizes to make them more affordable.

Looking ahead and as estimated

by UN-Habitat, Accra’s population alone is projected to grow from 2.5 million in 2011 to 4.2 million in 2025, which clearly shows that the deficit isn’t lessening anytime soon. Though that

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sounds gloomy, therein also lie opportunities for development of houses and increasing the stock. Most of the stock is being delivered by the private sector, while recently, the government has through a number of publicprivate partnerships initiated affordable housing projects.

Commercial: Within the retail space, made up of shops, eateries, malls etc., both landlords and tenants are rethinking their business models. Those in the fast food industry, for instance, have had to resort to take-outs and delivery services only. Landlords are having to offer some rent concessions just to be able to keep old tenants. With respect to office spaces, the demand is on the decline as there is a shift to remote work from home.

Occupancy levels have also taken a dip, especially for serviced offices whose clients, short-stay expats and consultants with transitory business needs are resorting more to online meetings rather than in-person meetings, significantly affecting the lead generation funnel. With respect to hospitality, hotels especially have been hard hit, with those that previously had 80 percent occupancy rates now barely scratching 50 percent occupancy.

Industrial: There is a curious case with regard to warehousing, in that although land borders have been closed to human traffic, the ports are still seeing some activity, allowing for import and export of commodities and essentials like hand sanitisers, etc. Also, with online purchases witnessing a boom, it is estimated that there will be renewed appetite for warehousing or storage to stock up to meet growing demand from customers.

To your knowledge, what are the trends in housing supply/ delivery by both government and the private sector?

Cyril Tetteh: It is estimated that the informal sector, comprising mainly private vendors, delivers about 80 percent of housing supply. The formal sector particularly, comprising the private sector and the government, has initiated a number of affordable housing projects recently. The government has partnered with the United Nations Office for Project Services (UNOPS), committing to

provide 100,000 units under the Sustainable Housing Solutions Limited (SHS) Affordable Housing Programme, which will ensure the creation and provision of accommodation and a mortgage system for workers of Ghana.

Government also partnered Solin, a private company from Hungary, to construct 10,000 affordable houses across the country with polystyrene concrete technology.

The $200m Saglemi Affordable Housing development near Prampram is expected to add 5,000 housing units to the housing stock.

What are the major constraints to bridging the housing deficit in the country?

Cyril Tetteh: We have a whole gamut, but I will summarise some key ones as follows: high cost of construction; lack of affordable mortgages; over reliance on imported building materials; difficulty accessing project financing; poor infrastructure; and a defective land tenure system.

Kindly elucidate the constraint to do with land and infrastructure.

Cyril Tetteh: Poor Infrastructure: Some real estate developers have had to develop infrastructure like roads, electricity and water connections from scratch, and this has shot up project costs, which are then passed on to the end-buyer in highly-priced real estate units. It is understood that infrastructure cost varies from 10 to 30 percent of the price of a dwelling, depending on the location of the site in relation to the existing infrastructure.

Defective Land Tenure System: With ownership of land taking different forms, ownership usually is unclear and the processes are bogged down by bureaucracy. This has become a major bottleneck and barrier for real estate developers in obtaining large tracts of land for safe real estate development.

The lack of an efficient land administration system has also led to disputes and unnecessary delays of projects from longdrawn-out legal suits.

How have the government's land reforms over the years helped to ease the land problem?

Cyril Tetteh: There have been

a number of reforms over the last few decades. The Land Administration Project (LAP), for instance, was developed way back in 2003. The LAP sought to improve the security of tenure, simplifying prudent land management by establishing an efficient system of land administration at both state and customary levels. While reforms like these were largely well intended, there have been some structural and implementation problems in the past years.

Going forward, assumptions of widespread acceptability of land administration reforms must be well tested and a proper change implementation plan executed by soliciting support of the key actors to ensure successful implementation.

To what extent is finance a constraint, in terms of private developers' ability to obtain funding for projects, and also in terms of potential homeowners' ability to obtain mortgages?

Cyril Tetteh: Finance or, more specifically, access to funding to develop projects is a major constraint as it is the fuel the moves idea conception from paper to construction site. Some of the major issues that contribute to the inability of real estate establishments to access finance are noted in various studies as follows: Debt Gap: Most financial institutions believe that it is risky and administratively expensive to lend to small firms, including real estate establishments. Even when these firms eventually access some level of funding, they have to deal with other issues like high interest rates, provision of landed security or collateral, etc.

Information and Knowledge Gap: Over here, one of the main issues is information asymmetry.

This occurs when one party to a transaction has more or better information than the other party.

This causes a gap that may lead to rejection of proposals that aren’t bankable.

Equity Gap: Small firms are reluctant to surrender equity to outsiders because of the perceived loss of independence, control and freedom of action, dilution of earnings and the cost involved.

House prices in Ghana are considered to be excessive. What

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is your response to this, and how can prices be contained to increase access to homes?

announced policies such as the National Mortgage and Housing Finance Initiative (NMHFI).

their tier-2 pension contributions to acquire homes.

Cyril Tetteh: High-priced properties in Ghana are mainly due to high material costs, especially the imported ones; high land costs, both the direct purchase costs and other associated litigation costs; and development of new infrastructure costs. The solution or way out is to forge more publicprivate partnerships whereby government can provide land and infrastructure and then leave the development to the private sector who wield the expertise.

The government has placed housing high on its agenda for the next four years and has

What is your assessment of the government's effort to address the housing challenge?

What policies would you like to see to enable serious inroads to be made into the housing problem?

Cyril Tetteh: I think it is a commendable effort and one in the right direction. For me, the portions that look promising are the objectives, which I understand include to provide local-currency mortgages through selected banks. These institutions would raise capital through mortgagebacked securities from pension and institutional funds in order to offer low-cost, long-term housing finance. I also understand the fund would enable workers to use

Cyril Tetteh: Well, there have been some positive initiatives recently, especially the National Mortgage and Housing Finance Initiative (NMHFI). However, I would also like to see a Housing Research Fund that will be a step ahead in assessing the future, in terms of livability of communities within accepted standards; development of quality and affordable building materials; population dynamics and consumer demand for housing;

and green building designs that would ensure personal wellness within a protected environment.

The green agenda is especially close to my heart, and even though green elements have been incorporated into the national building code (yet to be assented to), there could be other tax breaks and incentives to promote green building and adoption of local design and materials, and to empower small- and mediumsized green innovators to scale up, which would then have a 360-degree effect on the whole value chain. Materials would then become cheaper, we could then build more affordable houses, and everyone would have access to some form of housing, no matter how small. Everyone wins.

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Interview Eng. Joshua Amegashie Viglo Lakeside Estate (Digital Marketing Manager of Silver Star Tower and Digital Influencer for the Kalmoni Business Group) How would you assess Ghana's housing situation at the moment?

Joshua Viglo: Obviously, there is a deficit as we all know. However, the challenge is how we tackle the deficit as stakeholders, including the government, developers, home buyers, and land providers (traditional rulers).

It is an issue of roles and responsibilities, and cost for value per demand for us as Ghanaians.

Research on the sector points to a housing deficit of about 1.5 million to 2 million units, based on four permanent residents per household projections.

There is also a complex issue of how to define the household in the context of a small studio or even a kiosk all the way to a big plush luxury home.

There is a collective role that all stakeholders have to play in order to bridge this gap. There is a role that the government needs to play and there is also the role that developers can play. One of the biggest challenges is a huge specification versus purchasing power or willingness to pay.

It is barely possible to provide preferred homes at offered amounts due to a minimised appreciation of cost and value.

To your knowledge, what are the trends in housing supply/delivery by both government and the private sector?

Joshua Viglo: For the sale of housing, government and developers are making every effort to supply the housing units. For affordable housing, the government has been working on providing affordable housing, which is defined as a housing unit that has a living room, bedroom, washroom, kitchen, and other amenities and utilities, which costs between GH¢150,000 to GH¢350,000 (equivalent to about US$25,000 to US$65,000).

There is a deficit in producing affordable housing. A lot more people need houses and a lot more wish they could own a house, but there are fewer available houses.

The few available ones are highend, beyond the US$25,000 to US$35,000 affordable margin.

The government’s affordable houses are currently priced at

Special Report on Housing

about US$40,000 to US$50,000.

At Lakeside Estate, we have a 2-bedroom flat for US$35,000 and another 2-bedroom selfcompound for US$60,000. There are a few other GREDA developers offering within this range.

What are the major constraints to bridging the housing deficit in the country?

Joshua Viglo: The projected housing units needed to bridge the housing deficit is about 200,000 homes per year. However, the reality is that housing provision is not too difficult but the buying of the housing units is difficult.

So, at the Lakeside City, if there are people to buy, we can build.

Same is the case for other GREDA members [developers], who can build if there is a ready and capable market. The government can equally build if there are people to buy. Supply of housing units will not be a difficult issue once the buyers have the purchasing power to buy these housing units.

The purchasing power of the people is low, which is largely due to the low income of workers in the country. In view of this, there is a need for an increase in the disposable income of Ghanaians as well as an adoption of a savings culture. There is a need to build capacity to earn more or consolidate incomes of spouses towards a higher household income.

We need to appreciate the complexity of housing provision.

All over the world, it is a personal development project or target and not an entitlement. There are some ways the government can make housing provision a bit cheaper. The government can provide land banks, which cost about 10 percent of every house, and also provide infrastructure such as road networks, water, and electricity, which in total cost about 25 percent of the housing provision. The land and infrastructure are estimated to cost about one-third of the price of a housing unit.

If the government is able to provide this component, it reduces the cost of providing housing units. The next thing to do is to go for high-rise apartments, which is the best option for affordable

housing. Developers and input providers need incentives such as tax breaks in order to reduce the cost of producing housing units.

There is also a need to improve the local content in the housing sector. Local construction input suppliers should endeavour to meet high-quality standards, and the general population should also draw towards made-in-Ghana projects, finishes, furniture, and even electronics if there is.

Kindly elucidate the constraint to do with land and infrastructure.

Joshua Viglo: The biggest problem in the provision of housing is the availability and reliability of land acquisition data under the current land tenure system. There is the need to harmonise the legal element. The law that governs land issues in Ghana is too old. The constraint can be tackled by the provision of land banks and digitisation of land registry, which the Lands Commission has been working on as part of the LAP project.

There is a need for full digitisation of the operations of the Lands Commission and for massive public education on the processes involved in land acquisition.

How have the government's land reforms over the years helped to ease the land problem?

Joshua Viglo: Although the government started the LAP project, it is taking too long to turn the Lands Commission into a fully-fledged digitised institution.

To what extent is finance a constraint, in terms of private developers' ability to obtain funding for projects and also in terms of potential homeowners' ability to obtain mortgages?

Joshua Viglo: The problem is that mortgage rates are too high in Ghana. There are some macroeconomic conditions that make mortgage pricing ridiculous in this country. We have tried to do payment plans, which don’t come with interest payment; however, the homeowners would have to complete full payment before occupying the houses.

House prices in Ghana are considered to be excessive. What is your response to this, and how can prices be contained to increase access to homes?

Joshua Viglo: This is due to the high cost of building homes, hence there is the need for highrise and efficient spaces, which to a large extent most Ghanaians detest. But with this option, the homeowner escapes the cost of land acquisition. The other way

out is for government to use incentive policies to promote local production of the construction inputs used in the provision of housing. The real estate and construction supply chain need to be made more efficient locally.

Is it true that building a house by yourself is much cheaper than buying from an estate developer?

Joshua Viglo: Theoretically, it seems true but the reality is way different. There are elements of private home construction that are usually not accounted for, such as the time of home owner’s supervision, professional expertise, risk and cost of litigation and official title acquisition, low land value due to the lack of infrastructure or the cost of personal infrastructural investment, loss of value due to the time value of money and inflation, and worst of all the inability to complete a project when the initial budget gets exhausted. So it’s basically an issue of full appreciation of the scope of works.

Real estate developers usually have experience and expertise and also are able to save because of economies of scale. I have witnessed a lot of Ghanaians fail at attempts to privately build or end up being scammed by a family member.

The government has placed housing high on its agenda for the next four years and has announced policies such as the National Mortgage and Housing Finance Initiative (NMHFI). What is your assessment of the government's effort to address the housing challenge?

Joshua Viglo: Government efforts to provide housing are too skewed towards public sector workers. There is the need to open it up to private sector employees, which has been quite difficult due to perceived lower job security.

What policies would you like to see to enable serious inroads to be made into the housing problem?

Joshua Viglo: There is the need for tax breaks for developers and on inputs used in the provision of housing units. The government should also facilitate mortgages for homeowners in order to reduce the high rates in the market. There is a critical need for land banks for estate development across the country.

In a long run, to reduce the cost of inputs in the sector, local construction input providers need to be empowered. There is a need for affordable housingtailored policies and innovations.

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Super Affordable Flats 1001 SAF 1001 is a unique development project of 1001 Super Affordable Flats, which is located at Community # 9 of Lakeside City in Accra, Ghana. This project will include a variety of apartments, from the students’ (or workers’) studios to the two-bedroom flat for the couples with only two kids and finally the three-bedroom flat for the couples with three or four kids.

A social and shopping centre is also included in this project. We aim to provide all the necessary needs for a person living within the SAF 1001 Community.

The individual would only have to move around by walking or biking for their daily activities (reducing carbon emission and improving healthy lifestyle).

There will be some small shops for those who would like to have their own small business near their accommodation, for example: retailers, artisans, etc. Green technologies will be introduced inside the project under many aspects so as to reduce the energy bills as much as possible.

The project prototype was launched on 30 April, 2016 by the directors of Lakeside Estate, some dignitaries from sister companies of the Kalmoni Busines Group, GREDA Secretariat, and the media. Based on the first prototype, a second bigger, greener and more efficient flat was launched with GREDA Executive on 31 January, 2020.

The Super Affordable Flats (SAF) started as a Kalmoni Business Group Employee Housing Project. It was intended to provide affordable housing for its workers as part of efforts to appreciate their loyalty and commitment. The project has now evolved into a nationwide affordable housing project which will “democratize home ownership” in the heart of Accra. It incorporates a “reverse mortgage” option which allows the Ghanaian worker or entrepreneur to pay for his or her home within a span of five (5) years without incurring interest.

The first phase, which is the “Freedom and Justice Cluster”, is located at Community #4 of Lakeside City, close to Madina Institute of Science and Technology (MIST), in Accra.

The SAF project is currently a storey

building with two flats on each floor. Each flat is made up of a living room, two (2) bedrooms, kitchen, balcony and a washroom.

Each flat is self-enclosed with 52 m² area and services of water tank, electricity meter and 250W solar system.

The SAF project has the potential to have up to forty (40) clusters with approximately four (4) blocks/cluster, giving 24 homes per cluster. Each block is three (3) storeys high, except the studios are four (4) storeys high.

Aside the 250-Watt solar panels installed on the roof for each flat with 1000 W inverter, some of the street lights will also work on solar energy. LED lighting, gas cooking, and water efficient faucets are among the green technologies incorporated in the finishing.

A proposed sewerage system to recycle the used water will be introduced. A public park with a lake and cluster green spaces will be created inside each module of flats. A specific area for a vegetable garden will be provided for each block of flats. Each flat is equipped with an MTN fibre internet.

All these specifications with other services will be available for only US$35,000 for the 2-bedroom flat. These flats are designed for both owners and investors. The end-ofservice life of the flat is 50 years. A $1,000 amount will be invested in a 50-year bond for the 2-bedroom flats and returned to the last owner/occupant at the end of service of the flat. This will allow the project to be re-born safely after 50 years with some shareholder equity.

Specifications & Features – for 2 bedroom 1.0 General Specifications • Superstructure made with CWS (Concrete Wall System). This reduces cement use (greener construction) and insulates thermally the inhabitants from the tropical sun.

Also has acoustic insulation properties.

• 250 W solar panel + 1000 W inverter.

• MTN fibre connection.

• LED lighting.

• Efficient plumbing faucets.

• • • • •

•

•

• • •

Plumbing lines are exposed to provide quick and inexpensive maintenance.

Gross Area = 52 square meters.

Laundry and utility area.

Fitted kitchen and table-top gas stove.

Louver windows with mosquito net to provide maximum tropical ventilation.

Aluzinc roof 0.5 mm insulated with ½” plywood and felt to reduce heat load and provide easier maintenance after 25 years. Also gives some acoustic insulation.

Rain water harvesting for garden work from both roof and ground runoff.

Gated compound.

24-hour security with GHS100 monthly service charge Overhead water storage and sub-meters for water.

2.0 • • • • • •

Unfurnished Features Wardrobe (1) LED Ceiling Fan (1) MTN Fibre with router Utility Area Solar Components Each flat has one (1) designated parking

3.0 • • • • • • • •

Furnished Features (Extra Charge) 3-in-1 sofa and coffee table Dining set Bed (2) Ceiling Fan for bedroom (2) Wardrobe (+1) Bedroom and Shower Curtain Decorative Artifiacts and paintings (6) Nasco Double-decker fridge (1), size xxx L Nasco 43-inch smart TV (1) Nasco fully automatic top-loading Washing Machine Flower vase (3) Children’s desk (1) Study lamp (1)

• • • • •

(All info is restricted and proprietary specs for the SAF 1001).

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Meet Augustine Ewiah, leading from the front in the vast real estate industry of Ghana

By Natalie Roberts He is a passionate and dynamic real estate entrepreneur who is a CEO at Cameo 1 Homes, a growing real estate brokerage firm.

It is quite surreal to know and learn about all those individuals who have strived to go beyond boundaries to make a difference not only in their lives but most importantly, the lives of others through their work. This attitude and hunger to make it big in their chosen industries have helped them create a unique name for themselves as professionals and entrepreneurs.

Talking about the real estate industry that has welcomed many talents so far, it is perhaps one of those industries that have only seen a surge in their rise ever since, thanks to the numerous developments and the relentless efforts of entrepreneurs in the industry. We came across one such dynamic real estate entrepreneur named Augustine

Ewiah, who serves as the CEO of a one-of-a-kind real estate brokerage firm in Ghana named Cameo 1 Homes.

Mr. Ewiah, after returning from the US, realised there was a need for a professional service in terms of accommodations.

This led him deeper into the real estate industry, where he curated modern-day approaches, attracting homebuyers and helping them navigate complex real estate processes in an understandable fashion.

He always found passion in architecture, designing and making a profound and positive impact on people’s lives. He points out that though there are a number of beautiful homes across Ghana, he focuses on the ones that are up for sale by notable real estate developers.

Today, this visionary entrepreneur serves as the proud CEO of a rising real estate

brokerage firm called Cameo 1 Homes that operates in all the parts of Ghana and is headquartered at One Airport Square, Airport City, Accra. Cameo 1 Homes is a firm that is dedicated to its clients and understanding their individual needs, says Mr. Ewiah.

They believe in offering tailored and unique offers to all their clients, which includes different services like property sales, rentals, purchase, property management, relocation, property development, property insurance, real estate valuation, to name a few.

Mr. Ewiah highlights the aim and mission with which Cameo 1 Homes is growing in the industry; he says that the firm helps businesses, property owners and clients realise their dreams of owning, leasing, renting, and selling high-end and affordable properties across Ghana.

Recalling his earlier days in

starting the business, he says that people told him it won’t work out; however, he kept pushing the limits and had a strong belief that it would work out and that’s what happened.

What’s even more amazing about this incredible entrepreneur is that recently, he was bestowed with the Face of Ghana Youth Awards 2021 for his outstanding contribution to the development of luxury real estate in Ghana. The award was presented to him to recognise his contribution and impact on the youth and selfless support to the society.

Speaking about the influential factors in his business success, Mr. Ewiah says that his ability to listen more, being honest at work and working consistently and pushing limits has allowed him to achieve all his goals. To know more, visit the website, https:// cameo1homes.com/.

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Welcome to Nova Ridge at Appolonia City

Wake up in a place away from the busy-ness of everyday city life, surrounded by lush gardens and the serene ambiance of the eastern plains of Accra. It’s the kind of tranquility that drives you to succeed. Wake up in your own home with a constant supply of water, electricity, and internet to power your personal and recreational life. It isn’t just a better place to live in; it’s a world in which you thrive.

About Nova Ridge Nova Ridge is a premium gated community within Appolonia City, launched by Accra’s premier mixed-use development, Appolonia City, which offers fully-serviced plots with clean land title to individuals who

wish to build homes to suit their lifestyles, designs, and tastes.

The development has been carefully planned with required green areas, ensuring discerning residents have ample outdoor space free from the clutter seen in other new communities.

Nova Ridge is about 60 minutes’ drive from Accra Central and 40 minutes’ drive from the Kotoka International Airport.

The 50-acre area has over 500 plots, of different sizes, to suit all buyer needs. The plot sizes range from 40×60 to 100x100. Prices for plots start from $18,900.

Payment for plots can be made upfront or completed within 6 to 24 months. Appolonia City Development Company also helps our cherished clients to make mortgage arrangements

with financial institutions.

Residents enjoy world-class infrastructure that makes living, working, and playing in Nova Ridge a pleasurable experience.

These amenities include fullytarred roads with underground and covered drains, internet and electric power provided through underground cables, water, properly designed and constructed sewage systems, landscaping, and solar streetlights. A communal swimming pool and a clubhouse will also be provided to enable residents to exercise, network, and relax in comfort. The Nova Ridge community is also gated and security-fenced. Buyers can work with their architects and contractors to create exquisite custom-made homes within

Appolonia City guidelines and standards.

Appolonia City, itself, is a mixed-use development that has commercial and social infrastructure like schools, hospitals, and supermarkets, which Nova Ridge residents can patronise. There is also a light industrial area for manufacturing and service companies. This will enable Nova Ridge residents and others within Appolonia City who desire to work close to their homes to do so.

People who bought Nova Ridge properties for their investment are also making incremental gains as the value of their properties has sky-rocketed over the years. This makes Nova Ridge properties the perfect choice for investors.

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Bijou Homes within Appolonia City

Bijou Homes is a gated residential community of 100 elegant and affordable homes. It is a first-class urban development with well-planned infrastructure and amenities in a secure and childrenfriendly community.

Appolonia City is a 2,325-acre (941-hectare) mixed-use and mixedincome urban development in Greater Accra. Appolonia City is approximately the size of Tema Communities 1 to 6 combined. The project is being developed for residential properties, retail, commercial centres, schools, healthcare and social infrastructure.

Bijou Homes sits on 6.5 acres of land within Appolonia City. Each home has an 87-year leasehold interest. Bijou Homes is a development of 1- and 2-bedroom houses with expandable features. The property is a 35-minute drive from the Kotoka International Airport.

OPAL is a 1-bedroom expandable to 2,

priced at US$50,000, with a floor area of 61 sq.m and plot size of 35’ x 70’. BERYL is a 1-bedroom expandable to 3, priced at US$54,000, with a floor area of 61 sq.m and plot size of 35’ x 80’.

JADE is a 2-bedroom semi-detached expandable, priced at US$75,000, with a floor area of 90 sq.m and plot size of 35’ x 80’. ALEXANDRA is 2-bedroom terrace, priced at US$70,000, with a floor area of 95 sq.m and plot size of 25’ x 60’.

At Bijou Homes, each property comes with pre-painted aluminum long span roofing sheets, and external security doors and internal flush doors. All floors are tiled. The property comes with plastic T&G and plasterboard ceilings and aluminum sliding glazed windows.

External walls are given a fine and smooth textured paint finishing, while the inside walls have been given a smooth finishing. The property is fitted with sanitary appliances, kitchen sinks, wall

mirrors, wash hand basins and water closets with dual flush systems and Bio fill sceptic tanks.

Appolonia Business Park offers 70 acres (30 hectares) of modern commercial areas.

The park is designed to accommodate a range of uses including manufacturing, processing, storage, logistics and service companies.

Why Bijou Homes We offer value for money and quality properties at competitive prices of varied designs to meet different individual and family needs. Properties are expandable and flexible for any future alterations.

We also offer mortgage plans for interested homeowners and other flexible payment options. There are varied investment opportunities at our business park.

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Improving the efficiency of the mortgage market judgements: After judgement is given by the court, the Court Registry needs to put together documents to facilitate smooth execution of the judgement. This takes some time coupled with the back and forth applications to enforce the judgement.

Sometimes, interested parties may file for stay of execution and this may stall the process for a long time.

• Missing dockets: The docket on the case can get missing. When this happens, the case comes to a standstill until the docket is found.

Kojo Addo-Kufour Executive Head, Home Loans Business, First National Bank Tell us about First National Bank's mortgage product(s).

Kojo Addo-Kufour: First National Bank has a wide range of products to suit varying needs: • Home Purchase Loan to cater to the needs of people who want to buy an already-built house.

• Land Purchase Loan to cater to the needs of people looking at buying a plot of land.

• Home Construction Loan for individuals who need help completing a house they have started building or want to build from scratch on their own plot of land.

• Homeowners Loan to cater to the needs of existing homeowners looking at using their homes as collateral to raise funds for other purposes.

• Save-to-Own, a unique solution for self-employed individuals who would otherwise have difficulty in meeting all the regular bank’s criteria for a home loan.

Mortgages remain a small fraction of lending activity in Ghana's financial sector. What constraints explain this situation?

Kojo Addo-Kufour: Despite the introduction of the Home Finance Company in the late 80s, indicating that home loans have been around for over 30 years now, many individuals are still unaware or not sufficiently educated on it. The bank has realised this over the years as we have invested a lot in public education activities. There is still more to be done, however.

First National Bank is one of the notable names in mortgage lending. How have you navigated the challenges of the market?

Kojo Addo-Kufour: The major challenges we have identified and experienced are: low incomes; escalating prices of properties; and high interest rates. A greater percentage of the population earn low incomes (less than the equivalent of $1,000.00), which means very few people are able to afford a home and a home loan.

Special Report on Housing

What conditions and reforms are needed to increase the availability and use of mortgages?

This has really been out of our control. The rapidly escalating prices of properties has also posed much challenge. We have in previous years come in to assist developers with cheaper sources of funding to help arrest the high prices they tend to quote.

With interest rates, the government in 2018 introduced an affordable mortgage scheme whereby they provided certain financial institutions with cheap sources of funds for home loans.

This would make the interest rate for customers much lower than the banks usually have because the banks have to raise the funds on their own, which are not cheap. This first phase was targeted at government sector workers and we are hoping that the government would identify more avenues to enable us extend this to every worker.

What is your assessment of the mortgage market's legal framework and regulation, and to what extent does it hinder or promote transactions?

Kojo Addo-Kufour: The process of registration of title is one that does not favour banks or mortgage lenders. Records of land ownership with the land agencies are not foolproof or always accurate, and this poses a big problem to us when trying to register title and register our mortgages. It has brought about multiple sales and the bank losing properties in some cases.

As a result, it has prevented the

bank from offering mortgages on properties in certain areas.

The legal avenues available to us as a bank to foreclose on properties of defaulted clients is also fraught with challenges.

We experience delays with our courts that lead to the bank incurring losses by the time these foreclosure processes are completed. Some of these problems include: • Delays in assigning cases to judges for pre-trial: Observation made so far shows that, in most cases, it takes more than six months for the Court Registry to assign a recovery case to a pretrial judge to explore possible settlement of the matter.

• Delay in forwarding cases from the pre-trial judge to full trial: There is a further delay from the conclusion of the pre-trial to the time that the docket is assigned and handed over to a trial judge, if there is no settlement at the pre-trial.

• Lack of complete understanding or appreciation of the credit transactions by some judges: Some judges are unable to fully comprehend the nature of the credits that the Bank has advanced to the defendant. The Bank then appeals the judge’s decision.

• Delays in the appeal process: It takes a long time for the Court Registry to organise the necessary documents for the cases to be heard by the Appeals Court.

• Challenges encountered with executing obtained

Kojo Addo-Kufour: As previously mentioned about government’s intervention in mortgage rates, their continuous effort is key in increasing the use of mortgages. Cheaper cedi rates for everyone (not just government workers) would make the mortgages more affordable for more people.

The government has placed housing high on its agenda for the next four years. What policies would you like to see to enable serious inroads to be made into the housing problem?

Kojo Addo-Kufour: An intervention by government in the provision of serviced plots/lands to developers to construct homes would go a long way in helping to reduce the cost of houses, which is a major stumbling block in the qualification for mortgages in Ghana. The average developer has to source their own funds to acquire land (which is becoming increasingly expensive) and put up the structures (using mostly imported materials) before selling. They tend to add on large profit margins to compensate for the stress involved in all this.

The lands provided should also include key infrastructure such as tarred roads, water, electricity, drainage and efficient waste disposal. Most of the developments being put up by private real estate developers lack such amenities and people who buy them are forced to find their own means.

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the pilot, the project was made accessible to only public sector workers within the low-income group.

Interview Dela Zumanu

What have been the main constraints to bridging the housing deficit over the years?

Acting Coordinator, National Housing and Mortgage Fund Tell us about the National Housing and Mortgage Fund (NHMF).

Dela Zumanu: A diagnosis of the mortgage and housing sector indicated a market failure which has persisted over many years.

To cure this situation required the intervention of government to restore the dwindling fortunes of this market. When you look at affordable housing in general, we have the demand and supply sides. The supply side technically deals with developing housing units and all activities involved in making those developments decent in terms of the provision of the basic infrastructure. The demand side deals with those who would occupy the housing units.

For this to work, the two sides need to work together such that each sees what the other is doing.

What we have been doing in the past has been to work in silos, where the demand side operates separately from the supply side, creating a dysfunctional market.

The government intervention was structured through the establishment of the National Housing and Mortgage Finance Initiative (NHMFI). The NHMFI is structured to stimulate both the demand and supply sides of the market by creating the opportunity for players in both spaces to engage and create pipelines of housing supply and effective demand to off-take those units. The NHMFI initiated two pilot projects which have been executed successfully in the last two years. Undertaking these pilot schemes has taught the NHMFI team very valuable lessons, which are currently informing the NHMFI on how to set up a more permanent fund with all the necessary complements it needs to deliver on its mandate.

The NHMF sits in the Ministry of Finance but operates to provide an enabling environment for both the demand and supply sides by way of funding solutions for construction and mortgage financing. The supply side sits in the Ministry of Works and Housing because they are focused on providing policy and leadership on designs, standards,

Special Report on Housing

and dimensions of the houses.

Going forward, we’re looking to pique the interest of the private sector in what we do by partnering with bilateral and multilateral institutions in terms of housing finance with the necessary incentives.

In the long run, the NHMF will not be involved actively in the housing market as we believe the private sector will have to take over. What we want to do going forward is to be more like a catalyst institution so as to supply the energy and the enabling environment for the private sector to take over this market to take it where it’s expected to be.

Dela Zumanu: The main constraints had to do with pricing of houses, which determined how many people could access mortgages to acquire them. The problem of litigation-free lands and their proximity to town are also constraints to affordable housing delivery. These are the real challenges we are looking to tackle. This year NHMF is looking at moving into the capital towns and cities in the other regions.

Bridging the gap has to do with solving the financing problem.

We are receiving interest from the private sector to partner government to deliver housing in larger quantities provided there will be demand for them. The NHMF initiative by government has improved market confidence, which has set the stage in addressing the housing deficit. We are very positive that in another 3 to 4 years, the mortgage market will begin to boom as it is in other countries.

What is the magnitude of the housing challenge that confronts the government?

What are the specific interventions that the NHMF will make to tackle these constraints?

Dela Zumanu: In spite of the 2 million housing deficit, there are still some housing units which are unoccupied for varying reasons.

The focus of the NHMF is to help reduce the deficit annually across the country. Our target is to do about 100,000 units within a four-year period, across the regions, municipalities, metropolitan areas, and districts.

This will deliver housing units in a consistent manner that will reduce the deficit gradually.

Remember, the NHMF is not a housing development entity but a catalyst body which has the advantage of having undertaken a pilot housing project.

We recently completed the Community 22 housing project.

Over 800 people applied for it in just the first week after the launch of the completed housing units.

GCB Bank has validated about 300 people, which is higher than the available 204 units. In April, the keys to these units will be handed over to the buyers. Under

Dela Zumanu: First, we are creating a pipeline for developers to access construction finance at very low cost, maximum at 15 percent. The second thing is also to make sure that the demand side is effective and liquid in terms of mortgage financing.

As a consequence, the NHMF is working to creating an effective demand pipeline to match the delivery of houses, because if developers build the houses and the houses are not taken, it increases cost indirectly. We have developed an effective demand market through public sector workers, groups and associations.

The evidence is the facilitation by NHMF of about 1,000 housing units for the Ghana Medical Association (GMA) through Republic Bank.

Going forward, the NHMF has started a cedi-denominated mortgage ecosystem which discourages the linking of mortgage payments to the dollar.

The partner banks who want to be

part of the government incentive schemes must be willing to fall in line. We are engaging with international institutions who have shown interest in supporting the players in the mortgage and housing market with all kinds of interventions, including funding solutions.

What role will the private sector play in these interventions?

Dela Zumanu: The private sector will come in with their investment. We have got about 10 to 15 private entities seeking to partner with government to deliver affordable housing units.

What government has done these two years is to create the enabling environment for the private sector to thrive in this sector.

Concerning the mortgage market, what will the NHMF do to increase the availability of mortgages?

Dela Zumanu: The problem with mortgages is that the rates are just too high and also linked to the dollar. We found out that banks were demanding high rates because of the risk involved. So, when you deal with the risk the banks have to deal with, you will force them to reduce the rates.

Government came up with the NHMF schemes whereby banks have access to cheap funds, which reduces the cost of capital for both housing and mortgage finance. Government decided to bring in 50 percent of the funds to finance the mortgages, at a 2 percent cost. Hence, through government’s initiative, banks are offering construction finance at 15 percent cedi-rated and mortgages at 12 percent cedi-rated. The banks involved in this are Stanbic, Republic Bank and GCB Bank.

Through this scheme, government has streamlined and made it easy for ordinary Ghanaians to access mortgages to finance their house purchases.

First, the mortgages are cedidenominated. No mortgages would be linked to the dollar.

GCB Bank’s mortgage for the Community 22 project is at 12 percent, between 5 to 20 years, with the least house price being GH¢170,000.

So we have solved that problem, just by government intervening in this market.

The issue of infrastructure, which is about 20 percent of

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the cost of any housing project, keeps the cost of houses high.

To deal with this, government is willing to subsidise the cost of infrastructure to keep the cost of housing units at affordable levels.

The other issue solved through this project is the effective demand with access to cheap funding. Banks operating under the project take over the housing units and issue mortgages for them after completion. As a result, developers are now willing to take small margins because of the off-taker arrangement under this project.

Solving these problems really wasn’t rocket science. It was just the willingness of government to intervene at the right place, at the right time and with the right incentives. With the twoyear pilot we have learnt that this approach works.

What progress has the NHMF attained to date?

Dela Zumanu: The NHMF has set up two schemes, the Mortgage Scheme and the GCB Bank REIT (Real Estate Investment Trust).

These are the two success stories

Special Report on Housing FRIDAY, 5TH MARCH, 2021

in the two-year period of the fund.

The mortgage scheme, which is with the banks, has delivered over 300 housing units, all under mortgages through Republic Bank, Stanbic and GCB. The Rent-to-Own REIT with GCB Bank Capital has also bought apartments and houses, almost 100 of them. Of this, about 45 have been rented out at the Tema President Kufour affordable housing enclave, and more will be purchased because the Tema Development Corporation (TDC) has developed more of these houses.

get involved to fix the market, which we are doing with the NHMF. In the long run, the NHMF will solve the problem and therefore allow the private sector to do the majority of the work—even though we will still be in the market to ensure that continuously we are evaluating the work of the private sector, hence seeking the interest of the ordinary Ghanaian. Government’s supervising role will also boost the confidence of international investors in the sector.

How much funding supports the initiative, and from what sources? Is the government looking to leverage private capital, and how much?

What are the specific targets of the NHMF—in terms of the number of new houses to be constructed, mortgages to be provided, etc.—and over what time period will they be achieved?

Dela Zumanu: Government has put in some funding to support the pilot projects, with matching funds from some of the banks.

Government doesn’t want to stay in this business for long. In the past the market had failed, and when markets fail, it is the responsibility of government to

Dela Zumanu: In the next four years, we are looking at doing an average of 100,000 homes across the country. The location of these homes will be based on the indicators of demand, availability of land, among other factors. We are working with State Housing Company to roll out these housing

units from 2021 to 2024. Currently, we are assessing the level of demand across the country, at the regional, municipal and district levels.

House prices in Ghana are considered to be excessive. How will this initiative help to address the problem?

Dela Zumanu: Components that make up the cost of a house include the cost of land, infrastructure, cost of construction, as well as the cost of capital. From our experience, the cost of the house can be reduced because of a ready offtaker. Also, government is willing to provide incentives which will help to reduce the cost of housing through the arrangements set forth with the partnering banks.

The cost of capital, which used to be around 25 to 30 percent, has been reduced to 15 percent.

Government is willing to reduce the cost of infrastructure by almost 15 percent. With this, the cost of the housing unit has been reduced by almost 30 percent.

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Special Report on Housing FRIDAY, 5TH MARCH, 2021