Chartered economist, Paul Frimpong has urged the government to create a favourable environment for the private sector to promote the growth of Ghana’s real estate industry.
Mr Frimpong believes real estate investment should be led by the private sector in order to reduce the government’s expenditure and more importantly, curb the country’s growing debt.
Some proponents have argued that the private sector has not done enough to reduce Ghana’s housing deficit. For these individuals, the government must take the initiative and make direct investments to ensure the housing deficit is bridged.
Mr Frimpong however believes that the government does not have enough resources to fund such an activity and should rather channel more efforts into promoting private sector investment. He added that incentivising the real estate developers as well as creating regulatory frameworks were key to stimulating growth of the housing market.
“The government must create the enabling environment for the private sector to invest in affordable housing. This is because the government is limited with funds and such investments may take a toll on the government’s purse,” Mr Frimpong said.
“This should also be backed by enactments to regulate the sector because a laissez-faire system will lead to real estate developers taking advantage and imposing high prices on properties.”
The current government has taken a middle man approach to affordable housing, with ongoing projects such as the Saglemi Housing Project in Prampram and the nationwide 4,100 affordable housing units executed as a public-private partnership.
Mr Frimpong believes that such an approach is a step in the right direction since it will enable real estate developers to construct housing units on a large scale while ensuring the sale price is adjusted appropriately for the middle class segment.
“Public private partnerships augur well for the real estate industry. We should also be looking at how the low income segment can afford decent accommodation to reduce urban slum development,” he said.
Akua Nyame-Mensah, the Managing Director of Lamudi Ghana said: “The government can assist the private sector in providing affordable housing with special incentives and benefits. With better data and the backing of the government, the private sector can provide housing in specific areas and at prices that an average working class Ghanaian can afford.”
Ghana’s Enigmatic Economy
Over the past 10 years, Ghana’s economy has experienced significant growth. In 2011 for instance, the country’s gross domestic product growth rate was a staggering 14 percent, making it one of the fastest growing economies in the world. A major contributor of this growth was the country’s oil sector, which has attracted significant investment.
The challenge for the country over the years, spanning governments since independence, has been the struggle to rein in its debts.
Mr Frimpong believes that fiscal discipline is needed, and urged the government to focus on capital expenditure while finding innovative ways to generate revenue.
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