Ghana Business report [Housing]: where to from here?
Ghana’s housing deficit currently stands at 1.6 million units, and escalates with each passing year. A programme by the Ghana Business Report recently explored four reasons contributing to the housing crisis in Ghana, and explored some of the possible solutions:
1. Land use management: Ghana does not have a comprehensive land management plan, and this makes it unable to respond to the high rate of urbanisation. In 2009 over 50% of the population in Ghana were urban dwellers and the figures were projected to reach 65% by 2030. The programme reports that Ghana’s lack of a spatial plan is already translating into the mismanagement of land because people build wherever they want to build. Many metropolitan areas are said to already be in a state of chaos, the majority of these areas are characterised by “high incidence of malaria, cholera, and other environmental related diseases. Piped water is unreliable, solid waste management is abysmal; homes are built without permits and in flood prone areas. Majority of homes in the suburbs have no roads water or sewerage connections.” (Fordjour, 2009) There is a clear need for urban planning in Ghana to insure that land is proficiently handled.
2. Access to land: Ghana ranked second last in terms of the registry efficiency index, with the registration of title deeds taking 120 days. The land ownership system is still inefficient and in some instances, multiple registrations can be found on the same piece of land. In some states, land registration is not required by law. Developers see this as a significant risk. In states where land registration is required, the costs associated with the professional survey requirements are high and militate against compliance.
The Ghana Business Report episode reported on a number of solutions to the land registration challenges. One solution is to require all land owners to register their land, however this is very expensive. Some suggest that government should absorb the costs of land surveying, or purchase the land itself. Government capacity, both financial and administrative, to undertake these measures is limited, however.
3. Cost of building materials: A 50kg bag of cement costs between $8.55 and $11.18. The high cost of cement is due to the monopolised industry of cement production. The programme suggests that this can be remedied by creating an environment whereby other companies can also produce cement. Cement substitutes, while attractive, have not been well received in the housing market. It then becomes a matter of changing people’s perceptions. Another problem that emerged was that most (80%) of the houses in Ghana are built using imported materials such as: glass, doors, nails, sinks, tiles and many other materials. The programme advocates that the Ghanaian government should address these issues through its economic policies.
4. Access to housing finance: Few lenders offer housing credit, and those that do are not within the reach of the majority of the population. Borrowing costs are very high, with a lending rate of around thirty percent. The programme advocates for a partnership between government, financial institutions and real estate developers. Policies and programmes have to be in place coupled with a strong regulatory framework otherwise people will find alternative ways to shelter themselves.
The issue of land and land management necessitates commitment from the government in order to change policies that hinder development. Increasing annual urbanisation rates add further pressure upon the landscape, and due to the absence of an effective land management plan the urban space deteriorates as informal settlements sprout. Dispute over land and land registration exacerbate the situation by deterring developers from entering the housing market, especially within the affordable income bracket. Where to from here? The situation has been analysed and issues have been highlighted, solutions will need to be practically aligned to the Ghanaian government’s capacity. There should always be dialogue between the private and the public sectors because it is only through partnership that the housing backlog can be addressed.
The Ghana Business Report is a 30 minute monthly television report centred on business related themes. The report is televised as a documentary and its aim is to provide “financial literacy, entrepreneurship and business development”. The DVD was commissioned by Channel Two Communications, a communications and media company based in Accra (Ghana). The documentary aired on Thursday, 20th October 2011.
The documentary (DVD) can be accessed through the Channel Two Communications website:
- Ghana Business Report, Housing: where to from here? http://www.channeltwo.co/?p=gbr&id=104&curpage=1
- Fordjour, K. (2009) The State of Town Planning in Ghana, accessed from: http://www.ghanaweb.com/GhanaHomePage/NewsArchive/artikel.php?ID=171746&comment=0#com, date 30 January 2012
- Rust, K., Adejuyigbe, D. and Kihato, M. (2011) Housing Finance Africa: A review of some of Africa’s housing finance markets, Centre For Affordable Housing Finance in Africa A Division of FinMark Trust
- Sittie, R (2006) Land Title Registration. The Ghanaian Experience, accessed from: http://www.fig.net/pub/fig2006/papers/ps07/ps07_15_sittie_0848.pdf, date 30 January 2012
- Antwi-Barfi, F. Q., (2001) Ghana Housing Crisis, accessed from: http://www.modernghana.com/news/110212/1/ghana-housing-crisis.html, date 3 February 2012