The quest for affordable housing in Ghana has gained significant momentum as urbanization accelerates and housing demands increase. Recognizing the critical need to address this challenge, various stakeholders, including the government and private sector, have embarked on initiatives to provide accessible housing options for the populace. This article delves into the efforts being made to provide affordable housing solutions in Ghana, the role of government policies and private sector involvement, and the obstacles encountered on this path.
Government Policies and Initiatives
Ghanaian governments over the years have demonstrated a commitment to provide housing for its citizens beginning with the first president Dr. Kwame Nkrumah, he established the State Housing Corporation, Tema Development Corporation and Public Works Department (PWD) with flagship projects which developed new towns like Akosombo, Tema township or the residential estate (communities) for the brand-new Tema industrial city, other estate projects across the country, notable in Accra are the Labone estate, Ringway estate, Kanda estates, Awudome estates, Nyaniba estates etc, in Kumasi we can talk of the Patasi estate, Kwadaso estate, Buokrom estate, North and South Suntreso estates etc, later after Dr. Nkrumah, General Acheampong will develop the Dansoman estates. All these housing developments happened before housing needs became a crisis due to demand shortfalls, under the Rawlings regime – government began tackling the housing crisis through strategic policies and programs, the SSNIT housing scheme took over by developing apartment buildings known as “SSNIT Flats” for the working middle class across the country. Under Kuffour’s administration he also rolled out project across the country, most of which are still uncompleted till date, not long ago the state housing took over portions of those flats at Asokore Mampong in Ashanti and completed them for sale.
President Mills attempted what would have been the biggest housing development initiative in the nation’s history the STX housing project which outlined a vision to construct 200,000 homes and multiple construction materials factories to serve the purpose, the factories we were told will begin producing materials before the early phases of the project about 10,000 housing units to house the security services begins, this project unfortunately hit a dead end for many reasons, then under Mahama’s government, he built the now famous Saglemi, more than 2000 housing units out of 5000 completed although still sitting idle.
With Nana Addo’s administration, a lot of the work has been delivered through a diversified State Housing Company, a private partnered state institution doing business as the largest builder in the country now.
Another one of the notable initiatives is the National Housing Policy, aimed at enhancing access to decent and affordable housing for all citizens. The policy outlines strategies to facilitate land acquisition, promote affordable mortgage financing, and encourage public-private partnerships.
The “Affordable Housing” projects, initiated by successive governments, aims to construct affordable housing units across various regions of Ghana. These projects offer subsidized mortgage rates and flexible payment plans to enable low and middle-income earners to own homes. Through these policies, the government endeavors to bridge the gap between housing supply and demand while ensuring affordability.
Private Sector Engagement
The pursuit of affordable housing anywhere (not just in Ghana) involves a multifaceted approach that combines government policies, private sector engagement, and innovative strategies.
The residential market in Ghana, just like other countries in the sub-region, is characterised by excess demand with a deficit estimated between 1.5 – 2.0 million. A free market model operates where the private sector is the main supplier of new developments (Arku , 2009 -Tipple and Korboe 1998). Private sector participation plays a pivotal role in advancing affordable housing initiatives in Ghana. Real estate developers, construction companies, and financial institutions collaborate with the government to realize the goal of accessible housing. Public-private partnerships (PPPs) are being forged to pool resources, expertise, and funding for large-scale housing projects. Government identifies the Ghana Real Estate Developers Association (GREDA) as an important stakeholder and in the past engaged them with affordable housing quotas to be developed.
Private developers are also focusing on innovative housing solutions such as modular construction and cost-effective building materials. These strategies not only expedite construction but also reduce expenses, enabling developers to offer homes at lower price points.
Challenges and Roadblocks
While commendable progress has been made over the years, challenges still persist that require collective efforts to overcome. As part of the collective efforts, let’s highlight some of the challenges that hinder the progress of affordable housing initiatives in Ghana. Land acquisition remains a significant obstacle, as government struggles with disputes over ownership, inefficient land management systems, and inadequate infrastructure (good roads, water and other utility services) in certain areas makes it an unattractive venture.
Another challenge is the cost of construction materials, which can significantly impact affordability. Fluctuating prices of building materials, coupled with the need for quality standards means the construction materials market has to be import dependent and the price fluctuations are due to the exchange rate volatility, which present difficulties in keeping construction costs within budget especially over time.
Furthermore, the limited access to long-term mortgage financing remains a hurdle for potential homeowners. High interest rates and stringent eligibility criteria make it difficult for low-income earners to secure mortgages, even with government-backed incentives.
“Affordable” means what? Is it an affordable myth?
As we have said earlier the national housing policy aims at “creating viable and sustainable communities through the provision of adequate, decent and affordable housing that is accessible and sustainable to satisfy the needs of Ghanaians”(Government of Ghana 2015)…
Affordability is relative, but considering that the latest affordable housing project commissioned at Pokuase is schemed at putting a one bedroom studio apartment at $13,000 (130,000Ghc), and this price is based on cost elements which do not include the cost of land, we are told government secures free land for these projects, however the State Housing Company (SHC) against the Bank of Ghana’s directive is pricing the project in dollars to avoid erosion of the project capital due to hyper inflation, so what about the disposable income and purchasing power of the Ghanaian buyer, which is equally being eroded by this same hyper inflation?
Who are we targeting to buy these units? Is it for the middle class? Or the upper class will still buy them out as investment properties and rent them out to the less privilege for high rental income? Whichever be the case, whatever we in Ghana call an “affordable housing” houses its own myths and the truth is that, a housing scheme for the most vulnerable may only seem possible if it includes a “self-build” contribution by the citizens themselves which should be partly sponsored by government, without this approach more than 95% of the Ghanaian citizenry should not dream of home ownership.
Admittedly, addressing land tenure issues, streamlining construction processes, curbing the fluctuation cost of building materials and expanding access to favorable financing options are essential steps toward realizing the vision of affordable and sustainable housing for all Ghanaians. All of us as stakeholders will continue to collaborate and innovate, so that the pipe dream of accessing affordable housing may well become a reality, ensuring a brighter and more inclusive future for Ghana’s citizens, until then this has been the conundrum.
