The housing deficit: An end in sight?

In the early 1970s, then a little boy in primary school in my hometown, Goaso in the Brong Ahafo Region, I witnessed the construction of a new settlement called "Low Cost."

Initiated by General Kutu Acheampong, in the Supreme Military Council (SMC One) government and executed by the once vibrant State Housing Corporation (SHC), the project was initially meant to house the increasing number of government employees in the then Ahafo District capital.

The long-term idea was to expand the project and sell some of the houses at affordable prices to interested workers, thus the name, " Low Cost."

Unfortunately, the project was stalled after the palace coup that ousted General Acheampong and brought in SMC Two with General F.W.K. Akuffo as Head of State. Today “Low Cost” is a pale shadow of its past. 

From independence to the period I am refering to, the SHC undertook many social housing projects until the introduction of the Structural Adjustment Programme from the mid 1980s when this vibrant state institution began tumbling. 

In Tema, the Tema Development Corporation (TDC) also undertook many of such projects to house the people. Today TDC is a pale shadow of its original self.

When I walk through parts of Accra, coming across many homeless people and more living under sub-human conditions because they cannot afford decent housing or rent accommodation, my mind goes back to the glorious days of the SHC. 

It also heightens my fear of torrid times that lie ahead of the city authorities and the government in the quest to fight the housing challenge.

 

Housing deficit

Ghana's housing deficit is estimated at 1.7 million. This is quite disturbing because it impacts negatively on the economy. 

The annual housing requirement is about 150,000 but delivery is just about 50,000.

It is, therefore, essential that conscious efforts are made to close the gap by a workable housing policy. 

But as I write, the nation does not have a housing policy. This does not speak well of an independent nation of 57 years.

Somewhere last year, the Ministry of Water Resources, Works and Housing stated that it was working on a new housing policy that would address the huge housing deficit of the country.

The policy, the ministry explained further would revamp the mortgage regime and make it impossible for landlords to vary rent contracts to the disadvantage of tenants. We are still waiting for the birth of this policy.

 

Mortgage 

Listening carefully to President John Dramani Mahama at a recent meeting with players in the mortgage sector at the Flagstaff House, I could sense his determination to see as many people as possible secure decent housing.

But the fundamental challenge has been funding, thus the call on the private sector to come in.

The President's message to players in the mortgage industry was brief but loaded; “My vision for the housing industry cannot be carried out without your full participation. I will therefore support you to deliver decent and affordable housing for the people.”

  

Urbanisation and housing 

The housing challenge is not limited to Accra. Similar situations persist in other cities, though Accra remains the worst. 

As Ghana copes with the pressures of rapid urbanisation, housing the people has become a critical issue for the government to contend with.

The situation is especially dire for the poor in society, as the government’s housing projects and those undertaken by estate developers exclude them.

At the Kwame Nkrumah Circle, Kaneshie, Okaishie, Tudu, etc., thousands sleep in the open and makeshift structures, with all the attendant health and social consequences. Clearly, a potentially explosive situation is at hand. 

Shelter is a basic necessity of life which cannot be glossed over by any government.

But increased urbanisation in Africa has resulted in a major headache for many governments in their attempts to provide appropriate and affordable housing to the urban poor.

That is why the President's meeting with players in the mortgage sector was a positive step in overcoming the challenge.

Mortgage is not a microcosm of the housing industry. In modern times, it occupies a central position, driving the wheels of industry in a number of countries. But in our part of the world where incomes and employment opportunities are terribly low, mortgage becomes a problem for many people to rely on. 

Ghana is going through a critical period where the economy is facing some challenges. The President honestly articulated the current economic situation when he hosted a luncheon for senior citizens in Accra on Republic Day.

Nevertheless, the picture is not one of a failing state or an economic problem that is insurmountable. So, as the President indicated, there is light at the end of the tunnel.

The hands of government in the provision of infrastructure projects such as housing are therefore tied at least for now.

That explains why the President believes the private sector has a crucial role to play in housing the people. 

 

Rising cost 

Clearly, the houses constructed by estate developers can only be bought by the rich since they are costly. 

From contributions made by the mortgage industry players during their meeting with the President, it dawned on me that the cost of housing would continue to rise if appropriate measures are not put in place to address the rising cost of investment. 

The introduction of a 17.5 per cent Value Added Tax (VAT) on estate development, as well as the rising inflation and interest rates, all have negative impacts on the cost of housing.

 

Lesson from Equatorial Guinea 

I was recently in the Equatorial Guinea's capital of Malabo to cover the 23rd Africa Union ordinary meeting, and I was pleasantly surprised at the country's housing policy. Perhaps, it is the most ambitious housing policy to be undertaken by any country in Africa, although some say the small Central African country's housing policy comes next to that of the Republic of South Africa.

The policy forms part of the infrastructure revolution that President Teodoro Obiang Nguema Mbasogo has embarked on. The 72-year-old Africa's longest serving President, who has been in power since 1979, has led the government to embark on an expansive construction of apartment blocks, which are sold outright or rented out to the people.

Some have already been completed and occupied, while many others are near completion on the Bioko Island on which the capital is located. 

Apart from the apartments, the government also has in place the 'Poor People's Homes' programme, where houses are constructed for the very poor in the society for outright ownership. 

Large swathes of virgin forest in the city have been cleared to put up buildings for the poor people.

There are two and three-bedroom detached buildings and I was told one does not cost more than $5,000. Payment is spread over a period of 10 years.

And make no mistake, these are not ramshackle buildings. They can go for the middle class and even still, the privileged in some countries.

I leant similar buildings can be found in Bata, the second largest city and other urban areas in the country's mainland.

Such was the awesome spectacle that greeted me on my first visit to that country of some 1.5 million people.

Immediately, the question that came to my mind was whether Ghana could not do a similar thing for the people. Yes, we can, if the structures are put right.

Of course, the political, social and economic dynamics of Equatorial Guinea are not the same as Ghana. 

Equatorial Guinea has the highest GDP per capita in Africa standing at $22,300 per year.

Their economy is driven by boom in oil and gas. The country has one of the largest reserves of oil in the world. Currently, Equatorial Guinea is sub-Saharan Africa's third largest energy producer.

 

The social link

A lot of social problems are traceable to inadequate housing that is why the government cannot sit aloof for the situation to worsen. 

The health of the people, especially children, continue to be harmed by having to live in filthy and overcrowded homes.

Experts say children living in such areas often suffer behavioural problems, poor sleep, insecurity, infections and gastrointestinal problems.

It is also said that poor housing has a link with heart disease, strokes, asthma and mental health problems.

Crime, to some extent, also has a link with  inadequate housing.

Couples and their children sometimes have to resort to single bedrooms which come with negative consequences. 

It is, therefore, essential that the government creates a healthy housing policy that takes into consideration the poor, especially, the urban poor. 

The government also could, in collaboration with the financial institutions, create a micro-housing finance scheme to develop sustainable and affordable housing in low income communities.

 

Affordable housing

The stalled affordable housing project, which the government is taking steps to complete, is one project that can bring some level of comfort to a number of people, especially workers.

It is clear that the existing affordable houses, even when completed today, cannot meet the demand but at least it would be a step towards reducing the country’s housing deficit.

The decision to hand over the project to the Social Security and National Insurance Trust (SSNIT) is good.

Perhaps, there is also the need to take a look at expanding the projects in the long term to enable it to benefit many more people.

 

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