Ghana is a country on a quest to attain all middle income targets.
Even though recent times has seen a dip in the local currency’s value and mounting pressure on the country’s economy seems to suggest otherwise, the country continues to experience growth.
Growth for 2015 has been predicted to be 3.9 percent and with the financial and technical assistance from the International Monetary Fund, it is expected that the country will get back on track.
A middle income status comes with its set of peculiarities. Aside the benefit of a bigger capacity to borrow funds, middle income suggests the need for a country to reduce poverty levels and improve infrastructure. Ghana has been on a positive trend in respect to reducing poverty. Between 1992 to 2006, the country managed to reduce its poverty from 51.7 percent to 28.5 percent (Ministry of Finance and Economic Planning). The challenge however rests with the nation’s infrastructure, with an annual deficit of $1.5 billion. Housing is included in this deficit which drives home the need for more to be done.
The establishment of a housing policy would be seen as the first of many steps towards bridging Ghana’s over 1.7 million housing deficit. The housing policy in itself sheds light on a number of positive aspects expected to contribute to a thriving housing market. One of the issues it seeks to address is home rental.
The dream of every individual irrespective of their status or age is to own a home. As good as this sounds, it may be a distant mirage for many due to the incomes generated by majority of the working population. The supplementary tool to bridging the housing gap would then be providing more accessible and affordable rentals.
Ghana’s President Mahama highlighted the need for this focus when he stated at a symposium held by Shelter Afrique that over 50 percent of Ghanaians cannot afford to buy a house or qualify for a mortgage. His belief is that rental can take away some of the housing burden on the nation’s shoulders.
Shelter Afrique, a Pan-African housing finance institution is leading the call for more affordable rentals in Africa. The group indicated that rental would provide a viable solution especially for those in the low income bracket. The Executive Director of the Ghana Real Estate Developers Association (GREDA), Sammy Amegayibor shares the same view.
For him, incentives are needed to encourage private sector participation in realizing the dream for more affordable rentals.
“There is no direct incentive for the private sector to go into home rentals. This is because the fundamentals towards developing properties for rentals are absent. If we don’t have access to long term financing and the banks in Ghana today cannot lend to us for more than three years, how would this put us in a position to borrow money and invest in home rental,” he rhetorically asked.
Mr Amegayibor’s statement throws more light on the difficulty of accessing finance for home development in the country. With loans typically having repayment periods of two to three years, this adds to the challenge posed to private developers.
The housing policy has made provision for the creation of a special fund for housing that is expected to grant estate developers some financial relief. This and many others are the ways in which the country can bridge its housing deficit.
Mr Amegayibor is equally positive about the future, suggesting a growing collaboration with the government to help tackle the deficit.
Managing Director of Lamudi Ghana, Akua Nyame-Mensah said: “Housing is a major necessity for every citizen. The biggest challenge for many however has to do with the issue of affordability. The country’s focus has mainly been on providing housing for individuals to purchase.
“Rental too is a great option for affordable housing, especially for those who cannot meet mortgage requirements. It is now up to the government and developers to create an enabling environment for more affordable rentals in the country.”