A specialised bank that can provide long-term funding for housing is the answer to the country’s growing accommodation problem, Senior Minister-designate, Yaw Osafo-Maafo, has said.
“We need a bank that can provide medium to long-term funds to make the housing industry work. You can’t use commercial banks’ funds to support housing; these are short-term funds, he said at his vetting last Friday.
“We have to think through this again and see the way forward. We need a bank that can provide long-term source of funding because mortgage financing is not medium but long-term. People should be paying between 10 to 25 years for homes,” he said.
Ghana has an acute housing shortage, with the current deficit estimated to be about 1.7 million housing units, and is expected to hit 2.4million by 2026, if such measures postulated by experts and housing developers are not implemented.
The Ghana Real Estate Developers Association (GREDA) has been advocating the establishment of such a bank, following the collapse of the Bank for Housing and Construction decades ago.
Mr Osafo-Maafo, a one-time Managing Director of the Bank for Housing and Construction, answering a question posed by Samuel Atta Akyea, a member of the Vetting Committee of Parliament said: “It is a pity the system allowed the BHC to collapse. I think that the World Bank misled the whole country because the reasons assigned for the collapse of that bank were not tenable.”
GREDA’s Executive Secretary, Samuel Amegayibor, told the B&FT that: “I will encourage the incoming government to look at establishing a housing scheme; this has existed before. GREDA, the then Bank for Housing and Construction and the Social Security and National Insurance (SSNIT) worked together.”
“Government has been sitting and implementing projects. One thing I will really want to caution the new government about is not to go into the habit of ‘execute and go’; we don’t need that for housing. Housing is going to be with us forever and, so far as human beings, we are going to live and children are going to be born in the family. Housing will be with us forever, so, we will need housing schemes that will be self-funding and self-revolving to sustain it,” Mr Amegayibor, who is also the Managing Director of Homes Direct, added.
Land acquisition challenges is another issue GREDA wants addressed, in which regard it proposes that all lands be vested in the state.
If all lands are vested in the state, they argue, it is only the State that would be empowered to sell, and individual owners wanting to sell land would inform the state as and when they want to sell and to whom. The State then executes the transaction and the monies paid to the owners.
Across the country, various affordable housing projects are ongoing, including the Ghana-OAS Brazil 5,000 affordable housing project at Saglemi, Ningo; and GoG-Sethi Realty 5,000 affordable housing project at Kpone.
In the past, the Social Security and National Insurance Trust (SSNIT) has also helped to provide some condominium housing. These interventions, however, appear to be a drop in the ocean so far as the housing deficit is concerned.