Housing Finance in Ghana

Overview

Solutions for more affordable housing options for urban dwellers continues to be on the top of the development agenda for the Ghanaian government. Ghana’s housing deficit witnessed a 33% reduction from 2.8 million (2010) to 1.8 million (2021), partly attributable to the real estate boom and a 72.8% increase in residential structures within the period.^[1] The country’s annual population growth rate has declined since 2010, and reached an average of 2.1% in 2021, the lowest since the country gained independence in 1957.^[2] Within the last decade, the percentage of the population that is urbanised has increased from 50.9% to 56.7%, particularly in the Greater Accra and Ashanti Regions, two of the most populated regions in the country. Out of a total of 16 regions, seven have the majority of their population residing in urban areas, with the remaining nine regions being predominantly rural.

At the end of 2021, real GDP growth rate was 5.4% compared to 2020’s rate of 0.5%.^[3] The growth was driven by the expansion in the service (9.4%) and agriculture (8.4%) sectors, which contributed 49% and 21% to GDP growth respectively. Industry however, contracted by 0.8% in 2021, contributing 20%. The Ghanaian cedi also depreciated against the USD dollar by 4.1%^[4], and by the end of the third quarter of 2022 the cedi had depreciated by over 40%, leading to sharp increases in cost of goods and services as well as building materials. Headline inflation was 12.6% at the end of 2021, but by August 2022, stood at 31.7%.^[5] These losses informed an emergency monetary policy on interest rates which will likely erode the gains made by the housing sector, particularly as increases in interest rates will heighten mortgage prices and interest payments.^[6]

Climate change and inadequate planning has rendered many Ghanaian cities prone to flooding, while coastal settlements face the risk of coastal erosion, rising sea levels and flooding. In 2021, heavy rainfalls led to cities such as Accra, Kumasi, Sunyani, Cape Coast, Takoradi and Tamale being flooded and homes damaged, which temporarily rendered people homeless. Although flooding affects both rich and poor, low-income households were particularly vulnerable to loss as they had a protracted time of recovery after these calamitous events. The National Plan for Disaster Risk Reduction and Climate Change Adaptation was formulated in 2010 and was specifically directed to those households who lost housing during the 2007 floods.^[7] In the capital city Accra, a number of initiatives are currently underway to increase overall resilience and reduce riverine flooding of houses. Despite these measures, local governments have been slow in implementing District Management Plans (DDMP) for risk management.

^[1] Ministry of Works and Housing (2022). Reduction in National Housing Deficit Reassuring to Addressing Housing Challenges. https://www.mwh.gov.gh/reduction-in-national-housing-deficit-reassuring-to-addressing-housing-challenges/ (Accessed 28 August 2022). Pg. 1.

^[2] Ghana Statistical Service (2022), General report Highlights. https://census2021.statsghana.gov.gh/gssmain/fileUpload/reportthemelist/Volume%203%20Highlights.pdf (Accessed 28 August 2022). Pg. 3.

^[3] Bank of Ghana (2022). Annual Report 2021. https://www.bog.gov.gh/wp-content/uploads/2022/06/AnnRep-2021.pdf (Accessed 27 August 2022).

^[4] Ibid.

^[5] Bank of Ghana. News Highlights. https://www.bog.gov.gh/ (Accessed 28 August 2022).

^[6] Ncube M. & Ndou Eliphas (2011). Monetary Policy Transmission, House Prices and Consumer Spending in South Africa: An SVAR Approach. Working Paper Series No. 133. African Development Bank Group.

^[7] NADMO (2010). Ghana Plan of Action for Disaster Risk Reduction and Climate Change Adaptation. https://www.cadri.net/system/files/2021-06/Ghana-National-Plan-of-Action-for-DRR-and-Climate-Change-Adaptation_0.pdf (Accessed 12 September 2022).

Access to Finance

The financial sector in Ghana is made up of banking^[1] and non-banking^[2] finance systems, all regulated by the Bank of Ghana.^[3] There are 23 universal banks in Ghana^[5] including a number of mortgage providers^[7] that offer financial products related to home or land purchase, home improvement and refinancing and construction mortgages.^[8]

Bond Financial Services and Dalex Financing are non-bank institutions that offer general loans with flexible applications, including construction or improvement.^[9] Additionally, microfinance institutions, rural and community banks primarily service the credit needs^[10] of low- and middle-income households and (small) businesses in Ghana. State-led institutions include the Microfinance and Small Loans Center (MASLOC), which provides micro and small loans on a retail and wholesale level. However, most micro-credit facilities are not specifically designed for housing finance purposes and focus more on incremental building and development.

Banks mainly fund mortgages through deposits,^[11] issuing of bonds and refinancing facilities, which are also provided by other housing development institutions.^[12] In Ghana, mortgage rates vary significantly and are escalating due to high inflation. The Ghana Reference Rate (GRR), including margins, has moved from 14% to 26.5% currently.[13] COVID-19 propelled a significant rise in Non-Performing Loans (NPLs),^[14] while the recovery period has witnessed a steady decline of NPLs to 14.40% as of May 2022.^[15] This is expected to influence a stabilised level of lending by banks.

The Ghana Fixed Income Market (GFIM) is the existing national bond market, where the Government of Ghana, other quasi-government and corporate money market instruments are listed and traded. Although securitisation is not a common phenomenon in Ghana, a number of studies affirm a generally receptive financial sector for the adoption of securitisation as a potential financing instrument. Credit reference bureaus maintain a directly relevant role in the financial sector, as suggested by a 7% increase in the use of credit bureau services during 2019.^[16]

With respect to gender, women mainly drive the micro, small and medium enterprises (MSMEs) sector in Ghana, and are targeted by lenders for entrepreneurship and small business development. Contrarily, the land tenure system in Ghana is mainly regulated by customary law, under which property ownership and control is dominated by men, particularly in the northern part of the country. These socio-cultural practices limit women’s access to land and other productive resources.^[17] However, Ghana has seen a significant improvement in mainstreaming gender equality, including access to property, through commitment to several international guidelines and local policy reforms.^[18] Yet mortgage products are still generally not gender-specific. Ghana is at the nascent stage of collecting and utilising supply-side gender-disaggregated data, since the central bank only began to formally request collection and submission from financial services providers in April 2018.  Indicators for data collection, the estimation of baselines and verification of data collected are yet to be finalised.^[19]

^[1] Banks dominate the financial sector compared to non-bank financial institutions which account for about 18% of the banking industry in Ghana. The Republic of Ghana. (n.d.). National Financial Inclusion and Development Strategy (NFIDS) 2018 – 2023. https://mofep.gov.gh/sites/default/files/acts/NFIDs_Report.pdf (Accessed 20 July 2022). Pgs. 3-9.

^[2] Non-bank financial institutions include microfinance institutions, savings and loans, rural and community banks, finance houses, finance and leasing companies, mortgage finance companies, remittance companies, and credit unions. .

^[3] Bank of Ghana (2022). Regulatory Framework – Supervisory and regulatory authority.  https://www.bog.gov.gh/supervision-regulation/regulatory-framework/#:~:text=The%20functions%20and%20responsibilities%20of,safe%20and%20sound%20banking%20system (Accessed 15 July 2022).

^[5] Bank of Ghana. (2022).  Banking Supervision – Banks https://www.bog.gov.gh/supervision-regulation/registered-institutions/banks/ (Accessed 18 July 2022)

^[7] Currently mortgage banks in Ghana include First National Bank, Republic Bank, Stanbic Bank, Fidelity Bank, Societe Generale Ghana, Ecobank, Omni Bank, CAL Bank, Ghana Commercial Bank, ABSA Ghana, Consolidated Bank Ghana. Source: compiled from https://edenheights.com.gh/financing-your-property-with-mortgages-in-ghana/ and https://blog.meqasa.com/mortgage-providers-in-ghana/

^[8] First National Bank, OmniBank and Standbic Bank are observed to operate mortgage refinancing are gathered from these websites:https://blog.meqasa.com/mortgage-providers-in-ghana/ and https://edenheights.com.gh/financing-your-property-with-mortgages-in-ghana/

^[9] Meqasa.com (2020). Mortgage Providers in Ghana https://blog.meqasa.com/mortgage-providers-in-ghana/ (Accessed 15 July 2022).

^[10] Microcredit services and products offered are classified under “savings” and “loans”. Loan products are usually available in the forms of personal loans and business loans, offered for tenure ranging between 6-36 months.

^[11] This includes the interest paid by the central bank on deposits made by commercial banks, i.e., the monetary policy rate which is 22% currently.

^[12] Housing Finance Network. (n.d.). Housing Finance Market Overview (Ghana) https://www.housing-finance-network.org/index.php?id=275 (Accessed 20 July 2022)

[13] E-mail correspondence with official from First National Bank Ghana, 20 September 2022.

^[14] NPLs reached the highest 17.3% of gross loans in August 2021 during the pandemic.

^[15] Bank of Ghana. (2022). Economic Data – financial soundness https://www.bog.gov.gh/economic-data/financial-soundness/ (Accessed 20 July 2022)

^[16] Bank of Ghana (2019). Credit Reference Activity Annual Report.https://www.bog.gov.gh/wp-content/uploads/2020/10/Credit-Bureau-Activity-report-2019-Public.pdf (Accessed 27 July 2022). Pg. 6.

^[17] The Ministry of Gender, Children and Social Protection (2015). Mainstreaming Gender Equality and Women’s Empowerment into Ghana’s Development Efforts. https://www.ilo.org/dyn/natlex/docs/ELECTRONIC/103987/126660/F-515436150/GHA103987.pdf (Accessed 5 August 2022). Pg. 17.

^[18] Richardson, A. and Gaafar, R. (2016). Ghana: Land Access and Tenure Security Project http://www.landesa.org/wp-content/uploads/2016-Best-Practices-Case-Ghana.pdf (Accessed 15 August 2022). Pg. 5.

^[19] UNSGSA (n.d.). Collecting and Using Gender-Disaggregated Data for Financial Policymaking – key findings from 11 countries. https://www.unsgsa.org/sites/default/files/resources-files/2020-09/Policy_Note_Gender-Disaggregated_Data_FINAL.pdf  (Accessed 27 July 2022)

Affordability

The remarkable increase in the national housing stock is partly attributable to a concerted effort to address the affordable housing challenge by a variety of groups. This has seen government commitment to complete existing housing schemes and undertake new projects across the country.^[1] However, there have been public concerns raised over the high prices of some housing units, which range between GH¢99,000 (US$12 290)^[2] and GH¢136 920 (US$17 000) for one-bedroom apartment; GH¢182 500 (GH¢22 660) and GH¢225 520 (US$28 000) for a two-bedroom apartment; and about GH¢335 000 (US$41 600) for a three-bedroom apartment.^[6] Although these prices are within the range offered by average banking loan amounts, the key concern rests with the level of unaffordability for the majority of indigent households.

The average loan amount offered by lenders ranges from GH¢80 000 (US$9 930) to GH¢1 600 000 (US$198 650) for cedi mortgages and US$15 000 (GH¢120 815) to US$35 000 (GH¢281 900) for dollar mortgages.^[7] In relation to a mean national household income of GH¢2 828 (US$350) per month and a monthly household expenditure of GH¢1 071 (US$133) as of 2019,^[8] the affordability of mortgage and housing in general, remains far-fetched. The average Ghanaian employee would have to earn a minimum of about GH¢5 000 (US$620) in order to meet the maximum 40-45% debt burden required by lenders. It is worth noting that approximately half of the labour force is employed in various sectors including government, private, non-governmental organisations, religious and international organisations. The majority (77%) are employed in the private informal sector, while the unemployment rate is estimated at 7.8%.^[9]

The unaffordability of housing finance is exacerbated by weakened consumer sentiments resulting from the persistent increases in fuel prices, increases in transportation fares and rising inflation,^[10] which all undoubtedly contribute to the rise in housing prices. These difficulties continue to pose a major barrier to access to affordable housing by the working population in Ghana. This is in part evidenced by a remarkable vacancy rate (12.7% of all dwelling units in Ghana) despite a significant increase in the national housing stock. In this regard, the government aims to reduce house prices by 50% to improve affordability to the average earning Ghanaian.^[11]

^[1] ModernGhana.com (2022). Government develops new affordable housing programme – Akuffo-Addo https://www.modernghana.com/news/1148801/government-develops-new-affordable-housing-program.html (Accessed 21 August 2022)

^[2] Meqasa.com (2020). List of Affordable Housing in Ghana  https://blog.meqasa.com/list-of-affordable-housing-in-ghana/ (Accessed 15 July 2022).

^[6] Ibid.

^[7] Meqasa.com (2020). Mortgage Providers in Ghana https://blog.meqasa.com/mortgage-providers-in-ghana/ (Accessed 15 July 2022).

^[8] Ghana Statistical Service (2019). Ghana Living Standards Survey (GLSS) 7 – Main Report https://www.statsghana.gov.gh/gssmain/fileUpload/pressrelease/GLSS7%20MAIN%20REPORT_FINAL.pdf (Accessed 22 August 2022). Pg.19.8

^[9] Ghana Statistical Service (2022). Ghana 2021 Population and Housing Census – General Report Volume 3E: Economic Activity https://census2021.statsghana.gov.gh/dissemination_details.php?disseminatereport=MjYzOTE0MjAuMzc2NQ==&Publications# (Accessed 20 August 2022) Pg.27.

^[10] Bank of Ghana (2022). Monetary Policy Committee Press Release https://www.bog.gov.gh/wp-content/uploads/2022/03/MPC-Press-Release-March-2022.pdf (Accessed 19 July 2022). Pg.3.

^[11] Pulse.com.gh (2022). Gov’t to reduce affordable housing prices by more than 50%-Asenso-Boakye https://www.pulse.com.gh/news/local/govt-to-reduce-affordable-housing-prices-by-more-than-50-asenso-boakye/r983z08  (Accessed 28 August 2022)

Housing Supply

Detached houses are the most typical dwelling type in Ghana (63%), followed by terrace houses (known colloquially as compound houses) at 21%. There are more compound houses in urban areas (27%) than in rural areas (21%). Wooden kiosks are informal dwelling units that are predominantly urban, located in twice as many in urban areas as rural ones. Other forms of makeshift housing, including metal containers, quarters attached to offices or shops, tents, and wooden structures, constitute 4.6% of total national housing stock. Multi-family apartment living is yet to gain traction in Ghana, as only 3.1% of families live in these units.^[1]

The informal economy supplies the majority of housing stock, primarily through incremental construction. A significant number of these structures are built without the necessary planning and building permits, land deeds or title, and sometimes lack basic services, including water or sanitation, and are thus less formally transactable. The total mortgage debt of GH¢ 1.72 billion (US$ 13.85 billion) as at 2019 is small, which further confirms the small volume of housing supply and consumption within the formal sector.^[2]

Most housing in Ghana is owner-occupied, especially in rural regions, with the highest share in the Northeast (90%). Such properties are less investible, typically built without housing services and lack market-related property rights, although informally transferable within familial relations. The rental housing market, on the other hand, has an urban character. Greater Accra has the highest proportion of households who rent units (48%). Cumulatively, three out of every ten families are renters in Ghana and three out of ten households live with a rent-free tenure. Informal landlordism, common in urban areas, supplies urban rental dwelling units through the lease of houses or rooms within houses. Most of this housing is informally financed.^[6]

The smallest permissible residential land parcel in Ghana depends on the zoned residential area. Where land is zoned for intensive residential use, the minimum acceptable plot size for residential units is 110m², of which the building footprint can occupy 50%.^[7]

In 2018, the government acquired 5.77 acres of land in the urban areas of Sege and Ojobi for low- and middle-income housing projects. An additional 1 313 acres of land were acquired at Fiankonya and Kweiman, near Accra.  Most recently, the government has initiated a public-private partnership project to develop a 10 000-unit affordable housing project in Pokuasi, also near Accra. The government is providing land and on-site infrastructure as equity for the project.

Although access to essential housing services varies across administrative regions, access has generally somewhat improved compared to 2013.^[9] As of 2021, 27% of households have access to piped water.^[10] In Accra, 8 in 10 households drink bottled or sachet water, while in rural regions, families commonly drink well water.^[11] In urban areas, 87% – 97% of households use electricity as their primary source of power. Access to sanitation is limited. 16% of households have no toilet facilities, and only 35% of households have access to exclusive toilet facilities.^[12]

With regard to building material, approximately 90% are imported as finished or semi-finished products.^[13] Aluminium roofing sheets are produced in Tema District from imported ingots. Exceptions are aggregates (sand, stones, quarry dust, chippings) and timber, which are all sourced locally. Local substitutes, including tiles and paint, are commonly deemed as being inferior products compared to imported ones. Products such as cement, timber products, paint, basic plumbing materials, and sanitary wares are largely locally available.

The Association of Building and Civil Engineering Contractors of Ghana and the Ghana Real Estate Developers Association, are two key professional housing organisations in the country (although membership is voluntary). Parliament is yet to pass the Construction Industry Development Authority Bill, which will regulate the activities of developers and building contractors on a more formal basis.^[14]

The construction sector currently employs 14.5% of the Ghanaian labour force.^[15] On average, it takes 45 days to apply for a building permit, with a legal limit of 90 days, within which the Planning Authority must inform the applicant of their decision on the application.^[16] COVID-19 has contributed to significant disruption in the supply of building materials, which has led to price increases and supply shortages. Continuous depreciation of the Ghana Cedi, inflation, and the Russia-Ukraine conflict have worsened the price appreciation of building materials.

^[1] Ghana Statistical Service (2022). Ghana 2021 Population and Housing Census General Report Volume 3k https://www.statsghana.gov.gh/gssmain/fileUpload/pressrelease/Volume%203K_Housing%20Characteristics_240222.pdf (Accessed 19 July 2022). Pg. 30.

^[2]Gyamfi-Yeboah, F. (2020). The mortgage industry landscape in Ghana.9 Sep 2020. My Joy Online. .https://www.myjoyonline.com/dr-frank-gyamfi-yeboah-the-mortgage-industry-landscape-in-ghana/ (Accessed 21 July 2022)

^[6] Amoako, C and Boamah, E.F (2016). Build as you earn and learn; Informal Urbanism and incremental housing financing in Kumasi, Ghana https://link.springer.com/article/10.1007/s10901-016-9519-0 (Accessed 2 August 2022)

^[7] Land Use and Spatial Planning Authority (2011). Zoning Guidelines. https://www.luspa.gov.gh/media/document/ZONING_GUIDELINES_final_DESIGN.pdf

^[9] Ghana Statistical Survey (2019). Ghana Living Standard Survey.

^[10]Ibid.

^[11] Ghana Statistical Service. (2013). 2010 Population and Housing Census National Analytical Report)

^[12]Ibid. Pg. 30.

^[13] UN Habitat (2011). Ghana Housing Profile. https://unhabitat.org/sites/default/files/documents/2019-07/ghana_housing_profile.pdf (Accessed 11 August 2022).

^[14]City News Room (2022). Chamber makes case for construction industry development authority bill  https://citinewsroom.com/2022/03/chamber-makes-case-for-construction-industry-development-authority-bill/ (Accessed 23 July 2022)

^[15] Ghana Statistical Service (2015). National Employment Report https://www.statsghana.gov.gh/gssmain/fileUpload/pressrelease/NATIONAL%20EMPLOYMENT%20REPORT_FINAL%20%2024-5-16.pdf (Accessed 12 August 2022). Pg. 17.

^[16]World Bank Group (2020). Economy Profile Ghana; Doing Business. https://www.doingbusiness.org/content/dam/doingBusiness/country/g/ghana/GHA.pdf (Accessed 23 August 2022)

 

Property Markets

There are two types of land available for property development in Ghana: Customary (communal) land is owned and administered by chieftains, clans and families, and makes up over 90% of land holding; while public property is acquired and held by the President of Ghana for the benefit of the people. Currently, there is no formal private ownership of property – all land (other than public property) is communally owned and only land-use rights are transactable. The Constitution of Ghana and customary law precedents does recognise leasehold, but such land-use rights are mostly obtained through marriage, inheritance, or land lease. The Land Registration Division of the Lands Commission currently registers transacted property and maintains a land registry.

Land tenure insecurity is prevalent in urban areas, coupled with high transaction costs, convoluted property rights and weak institutional oversight. This is in part, caused by multiple sales and claimants to land, protracted litigations and an increase in property conflict, which adversely affects the emergence of robust land markets and investments. Efforts to digitise the land registry and improve market transparency through electronic conveyancing are ongoing.^[1]

The residential property market, where houses are bought and sold, is not common in Ghana, as most homes are built for owner-occupation. Houses are not sold multiple times but rather passed down intergenerationally or between families. A second-hand residential property market is yet to emerge. However, as the property market matures, investment and use interest will need to be decoupled, which should increase the share of investible stock.

In these conditions, real estate agents and brokers operate in both formal and informal housing markets. The passage of the Real Estate Agency Act 2020 (Act 1047) requires all agents, brokers, and other professionals to be licensed in order to practice.^[2] Currently, however, many land brokers are still unlicensed, a situation that has contributed to chaotic and sometimes charlatanic property transactions. Ghana Real Estate Professionals Association and the Ghana Association of Real Estate Brokers do offer training programmes for their members and advocate for professional code of conduct and licensing of professionals. So far, there are several real estate service providers that provide facilities management and data, helping to improve market transparency. However, none have a significant market share.

^[1] My Joy Online (2020). Digitalization records at lands commission to promote transparency and efficiency https://www.myjoyonline.com/digitalization-of-records-at-lands-commission-to-promote-transparency-and-efficiency-lands-minister/ (Accessed 12 August 2022)

^[2]The BFT Online (2020).  What the Real Estate Agency Bill Means for the Brokers https://thebftonline.com/2020/11/19/what-the-real-estate-agency-bill-means-for-brokers/ (Accessed 11 August 2022).

Policy and Legislation

The role of the State is limited to the facilitation of equitable production and allocation of housing stock. This does, however, provide an enabling framework to promote a more active involvement of private sector developers, cooperative groups and other actors.^[1] In this light, the government continues to pursue affordable housing development options through public-private partnerships, notably with international partners such as Brazil.^[2] These relationships are often complex and involve significant political, financial and technical challenges, as was the case with Chinese and Korean Developers in the past. The housing units delivered through these initiatives tend to be overpriced, far beyond the average earning capacity. The most recent policy initiative is the preparation of the District Housing Programme for the construction of rental housing units for public servants.^[3] However, there is limited evidence of direct support for indigent or affordable housing options, aside from the partial subsidy of household water and electricity tariffs which occurred during the peak of the COVID-19 pandemic.

Pursuant to the government’s objective to optimise revenue mobilisation, the Electronic Transfer Levy Act, 2022 (Act 1075) was passed in March 2022 to essentially broaden the tax base by imposing levies on electronic transactions. The initiative is expected to contribute to shaping the housing market with more clarity. Additionally, with the Tax Exemption Bill passed in 2022, it is anticipated that the proposed exemptions will serve as incentives for increased foreign direct investments in the real estate and housing sectors. It is also believed that the Fees and Charges (Miscellaneous Provisions) Act 2018 (Act 983) which has been repealed by the Fees and Charges Act of 2022, can make provision for a more formalised revenue stream by state agencies. This can create a strengthened environment for transaction security and reinforce confidence in the property market. Furthermore, an amendment to the National Pensions Act 2008 (Act 766) is proposed (awaiting enactment) to unify the fragmented pension scheme regime under a three-tier system. However, the sector’s regulator has expressed concern over the exclusion of certain sectors, particularly security services and its impact on the sustainability of the proposed system.^[4]

Land and property ownership is ultimately governed by the 1992 Constitution of Ghana, as well as the Land Act of 2020 (Act 1036). The latter aims to harmonise and consolidate various laws on land and land tenure. The Land Act 2020 also prohibits discriminatory practices in respect of land under customary tenure on the grounds of gender, disability, social or economic status and restricts the transfer of land (jointly held or acquired during marriage) by a spouse without the mutual consent of both spouses. The growing insecurity faced by widows under customary law has facilitated the passage of the Intestate Succession Act (PNDCL 111) ^[6] in 1985 to provide for the protection of property rights. However, the law only applies to self-acquired land, not inherited property, and thus excludes most communal properties.  About 80% of marriages in Ghana are customary, most of which are unregistered. Nonetheless, the amended Customary Marriage and Divorce (Registration) Law of 1985 (PNDCL 112) provides for the recognition of unregistered customary marriages.^[7] In recent times, a draft law on property rights in marriage was proposed to regulate property rights of spouses during dissolution of marriage, but was never passed.^[8]

^[1] Ministry of Water Resources, Works and Housing (2015) National Housing Policy, Government of Ghana.

^[2] Damoah, S. K, Ayakwah, K.J.A and Twum (2020). The rise of PPPs in public sector affordable housing project delivery in Ghana: challenges and policy direction, International Journal of Construction Management.  DOI: 10.1080/15623599.2020.1763897 (Accessed 10 August 2022).

^[3] MordenGhana.com. (2022). Government develops new affordable housing programme – Akuffo-Addo https://www.modernghana.com/news/1148801/government-develops-new-affordable-housing-program.html (Accessed 26 August 2022).

^[4] N. Dowuona & Company. (2022). Ghana’s 2022 Legislative Outlook https://www.ndowuona.com/insights/174-ghana-s-legislative-outlook-2022-ghana-s-legislative-outlook-2022 (Accessed 27 August 2022).

^[6] Provisional National Defence Council Law.

^[7] Chronic Poverty Research Centre. (2011). Challenges and opportunities in inheritance rights in Ghana – Policy Notes https://assets.publishing.service.gov.uk/media/57a08added915d622c000955/PN-Inheritance-Ghana.pdf (Accessed 27 August 2022). Pgs. 3-5.

^[8] ModernGhana.com (2020). The Property Rights of Spouses in Ghana: why the eight parliament should bite the bullet and pass a bill to regulate it https://www.modernghana.com/news/1044197/the-property-rights-of-spouses-in-ghana-why-the.html (Accessed 28 August 2022).

Opportunities

Ghana secured a US$75million (GH¢604 074 572) commercial loan from the African Development Bank in October 2021 for the Ghana Infrastructure Investment Fund (GIIF) to improve the financing and development climate, including affordable housing.^[1] There are currently opportunities for private investors to leverage these public resources for housing delivery through the ongoing PPP approach.

The Development Bank of Ghana (DBG), established in June 2022, provides long-term financing at competitive rates for private sector development, including the housing sector. Moreover, the Central Bank has committed an initial US$200 million (GH¢1 610 865 525) out of US$250million (GH¢2 013 581 906) to capitalise the institution. The government has also leveraged another US$550 million from Development Partners to support the DBG to attract private sector investors and other international financiers. The housing sector stands to benefit from these measures as it takes advantage of guaranteed loans that will be provided by the DBG.^[2]

A National Home Ownership Fund, in partnership with the banking sector has been created in 2022. This includes the Rent-to-Own Scheme of the Affordable Real Estate Investment Trust, as well affordable housing supported by GCB Capital. The funds mobilised will function as a mortgage refinancing mechanism for Private Financial Institutions (PFIs) to draw from in the form of mortgages to consumers or mortgaged-backed securities for investors. This in effect will improve the mortgage market and make it more fluid, hence reducing interest rates for mortgagees and homeowners and improving housing delivery.^[3]

^[1] AFDB (2021) Ghana: African Development Bank extends $75 million loan to Ghana Infrastructure Investment Fund for portfolio expansion.27 Oct 2021.

^[2] The Republic of Ghana (2021) The Budget Statement and Economic Policy of the Government of Ghana for the 2022 Financial Year. Ghana.

^[3] Ibid.

Green Applications for Affordable Housing

The Ghana Building Code (GS1207:2018) prescribes Green Building requirements. Local organisations for green building include the Ghana Green Building Council, an NGO that promotes and champions conservation of natural resources without compromising on accelerated economic growth. The Council is responsible for the Green Star Sa-Ghana Certification system. SGS Ghana also exists as a global certifying firm and local partner for green building certification, particularly the International Finance Corporation’s excellence in Design for Greater Efficiencies (EDGE).

Rehoboth Knightsbridge in the suburb of Kwabenya/Accra is the first affordable housing scheme in Ghana to achieve the EDGE green building certification.^[1]

Hydroelectricity is the major source of electrical power. 86% of the population has access to electricity. Off-the-grid service provision is being adopted to assist non-electrified communities, and the Ministry of Energy has recently targeted the installation of three mini grids in Ada. IFC and Ghana Venture Capital Trust provide green housing finance / microfinance.

^[1] https://www.rehobothpropertiesgh.com/floor-plans. (Accessed 10 August 2022)

Availability of Data on Housing Finance

Data on housing finance is published by the Bank of Ghana, Ghana Statistical Service (GSS), Ministries such as Works and Housing, and Finance and Economic Planning. Private developers, banks, brokerages and real estate agency firms also take full advantage of their online presence to market their housing and housing finance products and publish some market data.

Data is usually not published frequently enough to provide for real time updates on activities in the sector. The GSS undertakes a population and housing census only every 10 years, with the last one undertaken in 2021. The GSS collects gender-disaggregated data, but institutional players are yet to fully utilise such data to streamline their operations and achieve financial inclusion.

Websites

Bank of Ghana www.bog.gov.gh

Ghana Statistical Service www.statsghana.gov.gh

Ghana’s Venture Capital Trust Fund www.venturecapitalghana.com.gh

Meqasa.com www.meqasa.com

Land Use and Spatial Planning Authority www.lupsa.gov.gh