1. How President Mahama Should See the Housing Industry
Here comes another huge effort at dealing with another of Ghana’s major socioeconomic problems.
The John Mahama administration, pressured by its mandate to fulfill its campaign promises to bolster
chances of another tenure, seems to be touching on nerves. This time, it concerns the thorny issue of
providing housing for Ghana’s soaring population. Like all the rest, it comes with a mammoth
implementation problem. Sincerely, I do not wish to nib the idea in the bud and be tagged
“pessimistic”. I am an optimist, I believe in positive thinking, and I am a die- hard believer in Ghana’s
potential. But the issue on the plate: the Housing industry is not just shouting into line what one
expects. It is not just wished into being. The Housing Industry, like all the other elements of the
economy need planning and comprehensive policies that out span political regimes and parochial
interests. When properly planned and implemented, housing provides vital affects on an economy in
many ways: importantly, increased construction activities positively affects demand for construction
materials .This spreads to other industries, boosting employment and incomes. Studies have also
shown that increased housing activity correlates positively with higher consumer spending and
increases confidence in personal wealth status. The latter implies that wealth from housing could be
converted into personal wealth by turning them in as collateral for loans for business purposes. Thus
with good housing policy formulation and implementation, the housing industry should grow and
make significant contribution to Gross Domestic Product. Despite the ripple effects properly planned
housing brings, Ghana since independence is yet to glean any significant benefits.
The earliest Development Plans following from independence, aimed at tackling the nagging issues in
the housing industry stemmed from the 1960’s.First a 1960-65 National Development Plan initiated
the Tema Development Corporation (TDC) and the State Housing Corporation (SHC).These two
institutions were mandated with creating residential units for the growing population at the time.
Whilst TDC focused on the Tema Industrial enclave, the SHC assumed a countrywide role. However,
befaced with dwindling funding, these initiates did not meet the desired aspirations, resulting in
disjointed implementation. A 1986 National Housing Policy Committee followed, culminating into a
National Housing Policy and Action Plan which adjoined the National Shelter Strategy to improve
housing conditions in the country. Others followed including the Vision 2020 in 2000 and a Ghana
Poverty Reduction Strategy (GPRS1) which collectively did not achieve much. Indeed, subsequent
strategies aimed at addressing the housing shortage including the STX deal, have been equally
unfruitful. With the current trend of exploding population growth rates , the cost of not being able to
implement these initiatives have left much to be desired; evident in wanton destruction of homes,
complicated land acquisition regimes and multiple purchases of land. Indeed presently, housing in
Ghana is nothing to write home about.
The issue of housing is so important to Ghana’s economic growth and wealth.
Housing for Wealth
Economic principles tell us that if Ghana wishes to project its citizens into the middle class, it would
have to make it easy for its citizens to own houses.
Lee Kwan Yew’s Singapore story is a living proof. Being the first Prime Minister of Singapore, he saw
house ownership as the bedrock of the wealth creation agenda he desired for all his contemporaries
and future generations. He implemented sustainable policies in this regard and within the thirty or so
years of his administration, enabled Singaporeans to spawn houses into wealth, and launched his

2. country as the first Asian Tiger. Any serious capitalist society (or “Property Owning Democracy,”
borrowing the cliché of the NPP) takes the issue of land and landed property very seriously. Like it
happened in the West, housing agencies, banking and nonbanking institutions estate builders and
housing raw material providers, should be enabled to perform their duty of giving every Ghanaian a
home at an affordable price. This will not only guarantee shelter and rest, but takes beneficiaries
closer to achieving the prospect of leveraging property into wealth. For instance, if Tonyi the
President’s artisanal shoe maker owned a home, he could use it as collateral for a huge loan to
expand his business and employ more people. This is to say that when poorer Ghanaians are enabled
with property they could produce, secure or guarantee greater value in the extended market.
The directive by the President, aimed at cancelling the practice of charging rent advance for
outrageous periods to just one month, without commensurate increase in housing units, would lead
to increased black market activities. For the layman, it means that Landlords, Agents, Estate Owners
and the like would begin to court closed door negotiations on rent advance. It is more like a price
control regime, where rent advance needed to recoup the huge expenses made on houses is
curtailed, putting such investments at the mercy of Sharks who lend on short term basis at relatively
high interests. This is the point at which I bemoan the collapse of the Bank for Housing and
Construction and the divestiture of the National Investment Bank which now subsists on Universal
Banking, throwing its core functions to the dogs.
Importantly however, the pursuit of an affordable housing scheme should be considered with
caution. With respect to ownership, obviously not everyone can own their home. The financial crisis
in the U.S. was precipitated by efforts to make mortgages available to almost anyone — backed by
government guarantees — which led to a disregard for their ability to pay. Using the incidence of
high delinquent payments associated with Government loans (such as the Microfinance and Small
Loans Centre) as a proxy, an affordable housing scheme financed and managed by government may
not be sustainable. One needs to consider what precipitated the evolution of long term rent
advances (Three or Four years in some cases) in the first place: over the years, land lords had been
burdened with the reality that their tenants were not paying their rents on time, so in order not to
spend all their time trying to collect rent from evasive tenants who will always have an excuse, they
resorted to rent advance. But the idea of Government-built estates has been practiced before.
Government used to do that for civil servants — though there, the advantage was that they took
loans and paid out of their salaries. Government could introduce more such estates for the middle
class [there are plenty of privately-funded “luxury” and “executive” estate developments, it seems,
for the wealthy]. But that would have to be supported by greater availability of mortgages —
hopefully, the resort to Public Private Partnerships (PPPs) in addressing the housing menace could
proffer workable solutions.
Housing as a Tool for Solving Ghana’s Strike Problems and Preempting Terrorism

3. Affordable and available housing will not only engender wealth creation, President Mahama should
see provision of housing facilities as a useful tool to solving the general insecurity that comes with
not owning a house, or contemplating the prospects of demolishing of your house during your
lifetime. As is evident in his tenure, the Mahama government has witnessed some of the worst public
sector strikes in the history of Ghana. Not only that, this government has also experienced bizarre
instances of inhuman demolition of buildings. In such instance of general overcrowding in most
Ghanaian homes (average of 8.7 persons per household as reported by the Year 2000 Census), lack of
transparency in the land tenure system, an intercensal population growth rate of 2.7% per annum
with its commensurate teeming youthful population growing to meet a huge housing deficit, the
country is literally creating an army of disgruntled and wild population that would strike against any
legitimate authority. For Singapore, a teeming population of youth graduating from tertiary
institutions without decent homes to start life was perceived as a security threat. Lee Kwan Yew
thought of labor unrests stemming from not giving workers the opportunity to own their own
houses, so he promoted affordable housing schemes and went the extent of forcing farmers with
their farm produce and livestock to occupy apartments on the high towers. Housing schemes aimed
at ownership by citensenry has also been used to solve terrorism in Peru. Inspired by the reality that
housing units in Peru were accessible only to the upper class and prompted by destruction of so-
called “unauthorized” structures which increased insecurity and unrest, Hernando De Soto began an
economic move to systematize property rights and ownership in his native Peru. This move caused a
ripple effect in most South American economies.
Housing for Enhancing Productivity of Workers
Lastly Ghana’s search for productivity in all sectors could be achieved by ensuring that its citizenry
owned homes. According to a study by Rohe, Zandt, and McCarthy (2001) people who were satisfied
with their homes and neighborhoods were more productive at work. Evidently, Ghana’s
neighborhoods and houses are not decent enough for its growing population. With a general
acceptance that the average Ghanaian house is overcrowded and situated in a slum environment,
lacking necessary accoutrements, one should not expect the best from the average worker. This is
even more exacerbated by the growing perception that in a resource rich country like ours, the
Ghanaian individual courts the thought of not being able to derive his share of the huge revenues
that these resources would have generated. So workers may feel excluded from the wealth of the
nation and breed resentment in the end .This trend may occur at the mercy of expected productivity
needed to run the development machine.
I rest my case by reminding us again that house ownership enables nationals to spawn wealth and
translate the entire citizenry into the middle class. It’s the fastest way to prove that Ghana has
indeed attained the much sought-after acclaim of a lower middle income level status. Not all, since
there is increased perception of inequities in entitlements to the various social classes evident in
perceived class wars of the rich against the poor, there is a great need to restore the perception of
legitimacy of state authority among the lower class and enhance the social contract which makes us
civilized citizens in the first place, or else we are literally transforming the citizenry into “terrorists”
and “rebels”(evident in increased armed robbery activity and quick resort to demonstrations at the

4. slightest instance among the youth) These measures should aim to eradicate or reduce the trend of
unrest and strikes that have characterized the current administration.
Eli Fiadzoe
ISSER, University of Ghana,Legon
Email: e.fiadzoe@yahoo.com Mobile: 0506620585