At the recent “Meet the Press” series, the Minister for Works and Housing, Hon. Kojo Opong Nkrumah, announced groundbreaking measures to tackle the country’s housing deficit.
Central to the government’s strategy is a public-private partnership (PPP) framework, which aims to address affordability on the supply side by collaborating with private developers.
“We’ve made land available to private developers to eliminate their land costs, thus helping to reduce the overall project costs,” Hon. Nkrumah stated.
“This is a critical step in ensuring affordability, particularly in urban areas, where land acquisition and title issues have been a significant barrier.”
The government has secured over 51,800 acres of land for affordable housing projects.
According to the Minister, these lands are intended to be utilized in both urban and rural areas through two major initiatives: the Affordable Housing Program and the District Housing Program.
The former focuses on delivering affordable homes in urban areas, while the latter targets low-cost housing in rural districts.
Key Incentives for Developers
To encourage private sector participation, the government has introduced a series of supply-side incentives. These include:
Land Access: Developers no longer have to bear the cost of land acquisition.
Infrastructure Support: Horizontal infrastructure, such as roads, water, and electricity, will be funded by other ministries, significantly reducing the project cost for developers by up to 50%.
Regulatory Easing: A streamlined, one-stop process for regulatory compliance will be established to help developers cut through bureaucratic red tape.
Hon. Nkrumah emphasized the importance of collaboration between ministries in these projects, particularly in providing essential infrastructure such as electricity, roads, and sewage systems.
He noted that these measures would free developers from shouldering additional infrastructure costs, making housing more affordable.
National Homeownership Fund and Financial Solutions
Addressing construction financing challenges, the Minister pointed out that the government has set up the National Homeownership Fund, which leverages public funds to make financing more affordable for developers.
This blended financing mechanism aims to reduce interest rates for construction loans, which currently range between 25% to 30%.
Additionally, Hon. Nkrumah revealed that the government has created a sub-fund under the Ghana Infrastructure Investment Fund (GIIF) dedicated to housing.
This fund will support both private housing projects and government-backed affordable housing schemes.
Tackling Rural-Urban Migration
The District Housing Program aims to mitigate rural-urban migration by providing low-cost housing for teachers, nurses, police officers, and other public sector workers in rural areas.
By improving living conditions in rural districts, the government hopes to stimulate economic growth and development in these regions.
“The District Housing Program is vital for reducing rural-urban migration. We’re piloting new technologies, such as compressed earth technology, to build durable, low-cost homes in rural areas,” the Minister explained.
With these initiatives, the government is optimistic that it can significantly reduce the housing deficit over the next decade.
By fostering cooperation between the public and private sectors, these programs are set to transform Ghana’s housing landscape and provide more affordable housing solutions for its citizens.