President Nana Addo Dankwa Akufo-Addo has assured that government will complete many of the abandoned housing units across the country, started by former President John Agyekum Kufuor.
The President gave the assurance yesterday when he commissioned 204 housing units, constructed in nine months under the National Mortgage and Housing Finance Initiative.
President Akufo-Addo described the completion of the housing project as one of the successes achieved during the two-year pilot phase of the National Housing and Mortgage Fund (NHMF).
He noted that the country has a huge housing deficit, which had risen over the years, especially in the urban areas.
“Despite an annual supply of about forty thousand housing units, we are unable to meet the annual demand of some seventy-thousand homes each year, and the housing deficit has now exceeded two million housing units,” he said.
The demand-side challenges of home ownership, President Akufo-Addo explained, include the lack of adequate long-term funding, high cost of capital and high non-performing mortgage loans. In addition to restrictive banking regulations, high interest rates on mortgages have also reduced the appetite for mortgage financing.
NMHF
Desirous of fixing the demand–side challenges of home ownership, Government, in 2018, approved the National Mortgage and Housing Finance Initiative, with the aim of stimulating the local currency mortgage market.
“In operationalizing the initiative, the National Housing and Mortgage Fund (NHMF) was set up to pilot two schemes – the National Mortgage Scheme (NMS) and the Affordable Housing REIT’s (rent-to-own) scheme. The Fund is now working with players in the housing market, i.e. home buyers, developers and banks, to address the issues and create an enabling environment for a thriving housing market,” the President said.
Under the National Mortgage Scheme (NMS), mortgages are being underwritten at rates of 10 per cent to 12 per cent by the participating banks. This intervention has reduced mortgage rates by over 60 per cent, compared to the average market rate of 28 per cent.
The Affordable Housing REITs is promoting the rent-to-own scheme with only monthly rent payments and, after a period the occupant has the option to own it.
On the other hand, the rent-to-own scheme will eliminate the burdened 2-year rent advance system, and is designed to give low income workers the opportunity to rent and eventually own homes, with the focus on apartments and inner-city rehabilitation.
“Government will, therefore, use this framework, the Affordable Housing REITs, to revive the affordable housing concept, and complete many of the abandoned housing units across the country started by the 2nd President of the 4th Republic, His Excellency John Agyekum Kufour. The Affordable REITs will become the off-taker of the properties for the rent-to-own scheme,” President Akufo-Addo said.
Affordable housing
President Akufo-Addo assured that the Ministry of Finance and Ministry of Works and Housing will also partner to speed up work on delivery of houses under the National Mortgage Scheme and the Affordable Housing REITs Scheme, to encourage investors interested in developing affordable houses in the country.
He indicated further that the Affordable Housing REITs is working with Tema Development Company to provide off-take for the renovated Blocks at the TDC affordable housing enclave, through the rent-to-own scheme. The REITs is also working with Adom City Estates to provide off-take of more than 100 affordable housing units through the rent-to-own scheme.
“I must also mention that the National Mortgage Scheme (NMS) is working with Republic Bank Limited to procure 21 blocks or 150 units of the renovated Asokore Mampong Affordable Houses developed by SSNIT for the Ghana Medical Association (GMA),” he added.
With ‘four more for Nana’ and the New Patriotic Party, President Akufo-Addo assured that “Government, from 2021, will use this framework to support more private developers to build model communities across the country and expand the schemes to cover all Ghanaians.”
500,000 improved cookstoves
In a related development, the President also launched the distribution of the 500,000 improved cook stoves project at a ceremony at Akuse, in the Eastern Region.
During the 2nd Africa Climate Change Summit held in October 2019, in Accra, the President indicated how the effect of climate change was undermining Africa’s ability for growth and development. He pledged the commitment of his Government towards taking practical and proactive steps to mitigate the impact of climate change on the planet.
“I am happy to inform you that significant progress has been made, and very soon the programme for the LPG cylinder recirculation model, which will ensure wider use of LPG throughout the country, will be launched,” he said.
President Akufo-Addo explained that the use of these improved and efficient charcoal stoves, coupled with the ongoing reafforestation programmes, has the potential to reduce significantly the emission of carbon dioxide and the rate of deforestation in the country.
He thanked the East-West Power Corporation, the Climate Change Centre (CCC), and the Government of South Korea for providing the grant funding of US$5,500,000.00 to produce 500,000 improved charcoal stoves in Ghana in exchange for carbon credit to offset their carbon dioxide emissions.
Jobs
The President further added that about 200 direct jobs have been created by the project alone in Ashiaman, Komkope, Mobole, Achimota, Kasoa, Weija, Cape Coast, and Kumasi, where artisans were engaged in the production of the various components of the stoves.
“This is expected to increase to some 1,000 direct jobs, as we scale-up,” President Akufo-Addo said.
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