GIZ supports implementation of Ghana’s mortgage and housing finance scheme

Economics Giz Implementation
Giz Implementation

GIZ Ghana has commenced a capacity building training for staff of the Ministries of Finance and Works and Housing for effective implementation of Ghana’s National Mortgage and Housing Finance Initiative.

The training seeks to prepare the staff for the assumption of their role in managing the implementation of the mortgage and housing initiative launched in 2018.

It formed part of measures aimed at stimulating Ghana’s mortgage market and helping to address challenges of residential ownership.

The scheme will provide extensive construction of residential housing units across the country to promote social equity and stimulate Ghana’s economy.

Speaking at the three-day housing and mortgage finance opening session on Wednesday in Koforidua, Mr Detlev Jahn, Programme Manager of GIZ Programme for Sustainable Economic Development (PSED, Ghana), said GIZ was pleased to be part of addressing Ghana’s housing challenges.

The number of houses required to accommodate the entire Ghanaian population as of 2019, was an estimated two million housing units, according to the Ministry of Finance.

This is attributed to inadequate financing for mortgage, complex land tenure challenges, and high cost of land among others.

The government, therefore, established a national mortgage and housing finance initiative to provide extensive construction of residential housing across the country to promote social equity, Mr Jahn said: “And we deem it an honour to contribute to this worth cause.”

He said the initiative sought to address the challenges of residential home ownership in Ghana through a vibrant local currency mortgage market.
GIZ in response to a request by the Ministry of Finance, he said, engaged a housing finance expert to support the ministry with the implementation of the initiative.

He added that the capacity building session was part of the activities of the consultant, to enhance the knowledge of implementing agents of the scheme.
Mr John Kumah, Deputy Minister of Finance, highlighted the success of the scheme executed in 2020 at the pilot phase, which he enumerated to include the development of a new community at Tema Community 22.

He said the project involved the construction of 204 houses comprising one, two standard and expandable unit bedrooms and cited the purchase of selected blocks at Tema Community 26, TDC Affordable Homes and Adom City for the affordable housing REIT’ (rent-to-own scheme)

Mr Kumuh said over 462 mortgage applications were approved for public sector workers while over 1,500 mortgage applications were being processed by the participating banks, pending the completion of the houses by private developers.

“It is worthy to note that after the successful execution of the pilot phase of this initiative, the strategy now is to scale it up, set up permanent structures for the National Homeownership Fund and expand the scheme to cover all Ghanaians,” he said.

“The fund is now working with plyers in the housing market – home buyers, developers and banks,” he added. “To address the issues and create an enabling environment for a thriving housing market.”

He stated that plans were also underway to review Ghana’s Home Mortgage Finance Act, 2008 (Act 770) to strengthen the legal framework of the mortgage market.

Ms Cynthia Odonkor, Head of Component Financial Systems Development- Microfinance, PSED Ghana, told journalists that it was good the government had come up with the initiative to tackle the country’s housing challenge.

This is because it poses a security threat and expressed optimism that other donor agencies will come on board to help the situation.

“Right now a lot of people are not having places to sleep, people are sleeping under sheds, under makeshift systems, and under kiosks and others, and this is a security threat,” she added.

The training will cover five thematic areas structured in models that include; Legal and regulatory framework for housing and mortgage finance; mortgage finance schemes; housing and mortgage financing options; mortgage operations and practice; and mortgage financing and pensions fund management.

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