The Chief Executive Officer of Danywise Estate and Construction, Mr Frank Aboagye Danyansah, has decried Ghana’s growing housing deficit, which he said would require US$34 billion to address the shortfall.
The country’s housing needs is in short supply of 1.7 million units, and is projected to climb to two million by 2018, a situation which he said, required the introduction of pragmatic and deliberate policies and private sector participation to raise supply.
“Our housing deficit has reached 1.7 million units which is expected to reach two million by 2018. We would need about US$34 million to fix it,” he told the Ghana News Agency on January 12.
He said the government would have to build 190,000 to 200,000 units each year for the next 10 years to bridge the gap. This is expected to cost around US$3.4 billion for the 200,000 units.
He urged the newly appointed sector minister to revise the current Ghana Revenue Authority tax laws which he described as “bogus.” Presently, there is five per cent VAT on real estates.
He said the law states inter alia that before one could build affordable housing, it must be in consultation with the sector Minister and the Minister of Finance without spelling out modalities to qualify the company or person venturing into the construction.
He lauded the present government for creating a separate Ministry for Works and Housing that would largely focus on addressing challenges in the estate sector and close the demand and supply gap.
He said the new Ministry showed government has given priority to the housing sector to “help us achieve what we have been talking about that the affordable housing deficit gap is always increasing the ability of a household to spend up to 30 per cent of their gross annual income on rent.”
“What I am saying is that whoever spends more than 30 per cent of his/her annual income on rent, you are not living in an affordable way, you are living in an expensive way in terms of housing,” he said: “and to be able to do that, the house has to be broken down.”
“If the demand is less than the houses then it would force people to come down with the housing rent which would meet their pockets, something of that sort and that is the clear cut definition for affordable housing.”
The World Bank, in May 2016, reported that about 48 per cent of the youth from 15 to 24 years in Ghana did not have jobs and estimated that the figure would peak in the coming decade, thus raising concerns about the preparedness of Ghana to deal with the problem.