NANA AKUFO-ADDO’S SPEECH TO GREDA… Building a Society of Opportunities and Hope-Housing Matters
The President of GREDA, members of Council, members of GREDA, members of the media, invited guests, distinguished ladies and gentlemen, fellow Ghanaians. Thank you very much for coming in your numbers in response to my invitation, for this opportunity to address the subject of housing, one of the biggest problems that face our nation and which, I believe, should influence the decision we make on December 7 as we go to the polls to elect a President to manage our affairs for the next four years.
Picture that morning of December 7 and where the majority of the citizens would get up from, to go and cast their votes. In the urban areas, many voters would be coming from kiosks, uncompleted houses, containers, shop fronts, bare streets and other unsuitable forms of shelter and in the rural areas many of the houses would be badly ventilated and nationwide, there would be many trying to resolve the urgent problem of a demand of two to three years rent advance payment from landlords.
We have a housing crisis on our hands. I am sure many people have heard the figures. The housing deficit is projected at about 1.5million housing units. Annual housing demand is about 70,000 units. It is estimated that only about 40,000 housing units are added to the housing stock annually, leaving an annual deficit of about 30,000 housing units and growing.
According to the 2010 Housing and Population Census, there were over 5.8 million dwelling units nationwide, many of which are made up of wood, mud, metal, in an uncompleted and dilapidated form unworthy to be called a home; about 70% of which are without toilets.
This is an intolerable situation and we must put all our minds and ingenuity to find solutions.
Traditionally, we have sought to build houses individually and it takes a long time to do so. I have no idea how many people there must be who have started building houses which are at various stages of completion. Every other person has a “project” which lasts for many years. We have a lot of money locked up in these structures and often by the time we have finished building these dream houses, children are grown up and we do not need the three or four bedroom houses we have taken a life time to build. This is stressful, inefficient and unnecessarily expensive and we cannot go on like this.
Others fight a losing battle with landlords and are constantly in debt because they have to raise loans at high interests to be able to pay the advanced rents demanded as a rule. Some landlords would rather keep their properties empty, rather than rent them, because they cannot be sure how many people would end up living in a house they have rented to a family of three. Many people simply give up the battle and create homes in kiosks, containers and on the streets.
I have requested to meet with GREDA this morning because this is a most appropriate forum 1) to lay out in clear terms my housing policy proposals, 2) to seek your support and that of the millions of Ghanaians who daily face accommodation challenges to help make these proposals a reality.
Continuous constructive engagement with local industry players like GREDA will enable us better understand the challenges you face, and I look forward to deepening this interaction with you when, God willing, the NPP wins the December 7th election.
I am told that, over the past four years, GREDA has made several attempts to engage with the current NDC administration, and have submitted proposals with financing options to help address the huge housing deficit, without much success.
Unfortunately for all of us, this NDC government under the leadership of our new carertaker president, has preferred to chase a lot of pipe dreams when it comes to housing and that is what has led to the STX fiasco and now to the GUMA no-show. It gives us no joy to say “we told you so”. When the President announced the “South Africa GUMA Housing Project” and we were told that 500 houses would be constructed before the December elections, we pointed out this was another hoax project. Last Thursday, the Minister of Water Resources, Works and Housing spoke about the GUMA project, and I quote him:
“The prices, we have gone back and forth on the financial terms, the loan is quite expensive, the payment period is too short, and the interest and even cost of property when they have eventually rolled out, so that is what is stalling it.”
So if I may ask, what was the rush to announce the deal in May 2012 when all the relevant details had not been finalized and signed off? Ladies and gentlemen, this is another example of how the NDC has run our economy on propaganda and lies. You can’t build houses on propaganda.
So, how should we set about the urgent task of defraying the housing deficit to meet the annual demand of 70,000 units?
As I have said on other occasions, we cannot continue doing the same things the same way and hope to get different outcomes. We must find new ways of doing things to get the better results we desire.
The problems, as we all know, are many and varied. Land acquisition poses the greatest problem, but there are many other things that inhibit the progress of the housing industry.
I want to start by engaging the Ghana Institute of Architects. I want our architects to give us designs that would make buildings more environmentally appropriate and allow us to use local materials to construct houses that are not as expensive to build.
The cost of building in Ghana is far too high, building materials are far, far too expensive and our construction habits need to be modernized. I have never understood, for example, why we do not have standard size doors and windows in Ghana. Why do we not have standard size wardrobes and cupboards? There are many parts of the industry that require urgent and comprehensive attention and we shall bring regulations to ensure standardization in the construction industry.
We believe that government’s role is to facilitate strong collaboration between land agencies, family/stools/skins, banks, insurance companies, mortgage houses, building material suppliers and real estate developers like GREDA. Our goal is to reduce the housing deficit by about 10% within the four-year term, by increasing national annual output from 40,000 units to 100,000 units.
To be able to play this facilitation role effectively, an Akufo-Addo government will separate the policy-making and implementation functions of the Ministry of Water Resources, Works and Housing. We shall set up a regulatory body and a housing agency which will be responsible for implementing our Public and Social Housing programs.
The Housing Agency shall i) be dedicated to developing new communities and townships in partnership with the private sector ii) be responsible for acquisition, development, management and allocation of land banks for housing development, iii) raise funding for housing infrastructure, iv) promote our social housing programs v) partner and provide loan guarantees and off-taker agreements to the private sector to deliver affordable housing. vi) promote the secondary mortgage market vii) promote the use of local building materials and alternative technology in housing construction.
As presently constituted, the Ministry of Water Resources, Works and Housing does not have the capacity, the focus or the resources to execute effectively this program and drive the new agenda. The housing agency will borrow from international best practices and examples of countries such as Singapore, Brazil, and South Africa, which have all successfully carried out massive social and public housing programs, led by a singularly focused housing agency with significantly positive results.
The Agency shall raise funding from GOG Budgetary Support, Loans, Multilateral and Bilateral Sources, GOG Backed Housing Bonds, Pension Funds, Private Capital sources, Modeling and Land Financing Schemes.
One of the key primary responsibilities of the housing agency will be to create additional land banks. Under the Kufuor administration, land banks were identified around the country for the construction of affordable housing. The amount so identified is nowhere near enough to meet our needs and the agency will be encouraged to identify and establish large enough land banks to meet our needs. The lands, so identified, would be properly and legally acquired and compensation paid to the landowners. Land acquisition by government has become a contentious issue mostly because adequate compensation has not been paid to landowners promptly. We will make sure that compensation is paid timeously.
The aim of creating the land banks is to provide clearly demarcated, safe, secure and properly titled serviced and un-serviced plots for use by the private sector for social and public housing schemes. By doing this, banks and other financial institutions will be encouraged to finance housing projects, with the assurance that lending will be backed by land with secured title.
A proportion of these land banks and serviced plots will also be made available to private individuals at market rates, as a way of raising funds to cross-subsidize our social housing programs. Through this approach, we shall eliminate some of the hassle associated with land acquisition by individuals across the country.
The current situation of private individuals building houses in areas with poor infrastructure, poor drainage, poor water supply, poor road network and a lack of proper house address system will not continue. This situation leads to the inefficient distribution of public utilities to such areas resulting in illegal power and water connections, poor drainage and waste management systems. It is no wonder that the Municipal Authorities are overstretched with the management of our sprawling urban areas and have to manage with very little resources.
We will ensure that public servants, teachers, civil servants, nurses, doctors, members of the security services can participate in housing programs that will enable them own homes for their retirement so that the prospect of retirement no longer poses such fear and dread to public officials.
To be continued
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