Gov’t To Support Mortgage Industry With $1billion

Ghana’s maiden thirty year bond, which attracted a billion dollars from investors will be channeled into reducing the country’s rising housing deficit.

This will also be achieved through the provision of mortgages and the completion of the government’s affordable housing unit projects.

Finance Minister, Ken Ofori Atta disclosed this, after the issuance of Ghana’s sovereign bond

The country is expected to pay back investors at a rate of 8.62 percent.

According to the Finance Minister, the proceeds of the bonds will largely support the government infrastructural projects.

The thirty year bond issue he says will support the mortgage industry.

“It’s basically an indication of trust that people would want to go that long with your country… usually when you are creating mortgages, you benchmark them against twenty to thirty year paper.  So now we are beginning to get a sense of such type of pricing, as we create instrument to support the mortgage industry,” he stated.

Currently, the country’s housing deficit is estimated at 1.7 million.

Some industry watchers believe the figure will escalate to 2 million by next year, 2019.

Already the works and housing ministry has ditched an earlier plan of establishing a housing bank to meet the mortgage needs of majority of citizens.

It is now seeking to do so via already established commercial banks involved in mortgages.

Meanwhile, Mr. Ofori Atta believes investments into other critical sectors, with the bond proceeds, should drive employment creation.

“A couple of the key issues that our government committed to tackle are infrastructure deficit and job creation. The momentum and tempo for rolling out the infrastructure needs and supporting our projects which will create jobs is what we are going to be focusing on, together with the implementing agencies and the other resources that find the resources to back them up.”

The Minister who admits to securing new bonds anytime the conditions permit however says his team is working to improve Ghana’s ratings to double B’s and triple B’s to get better rates the next time around.