Government to lower cost of building for private developers – Asenso-Boakye
Francis Asenso-Boakye, the Minister of Works and Housing, has stated that the government will lower building costs for private developers by 40% to help them achieve the aim of affordable housing projects in Ghana.
The initiative will help to close the country’s housing shortfall, which stands at over two million units, with a supply requirement of roughly 200,000 units per year.
According to the Minister, the drop in construction costs as part of a “well-developed framework” to revive the affordable housing initiative and “further generate the needed opportunity for the majority of the country’s urban population”
“This, we feel, would be essential in resolving the supply side restrictions of the housing market,” the minister said during the kickoff of the Business 24 Real Estate Conference 2021 in Accra on Tuesday, October 19.
He explained that the framework was designed to leverage a balanced mix of public and private sector investments to satisfy the demands and financial capability of the “ordinary Ghanaian.”
“The ministry has identified each of the components of cost drivers that contribute to the cost of an affordable housing unit and has mapped out specific strategies targeted at each of these with the sole goal of making housing affordable for a large section of the population,” Mr Asenso-Boakye said.
According to the minister, infrastructure will be provided through dedicated financing and synergies with other infrastructure sectors, as well as planning and design through the adoption of space standards to take advantage of economies of scale and eliminate waste.
Mr Asenso-Boakye said “The government has planned to scale up the National Housing and Mortgage Fund, which was piloted in 2020, to stimulate the demand side of the housing market and create more access to affordable housing for the low- to middle-income earners. Considering how prospective homebuyers could use their tier-two and tier-three pension funds, to support their mortgage, especially in the area of initial deposit.”
He added that “The Ministry of Works and Housing is poised to be the forebearer in the area of the use of local building materials for construction. It is envisaged that every developer who wants to partner the government in our affordable housing drive, will incorporate the use of local building materials such as burnt bricks, compressed earth blocks, etc., in the construction of these affordable housing units.”
This initiative Mr Asenso-Boakye believes will go a long way to “reduce building cost and ensure the provision of affordable housing while boosting the local economy.”
“Certainly, this model presents the opportunity to attract long-term and sustainable financing for the low- to middle-income earners without the government providing guarantees and off-takers to attract private sector developers. Let me take this opportunity to urge all developers within the housing sector, to embrace this current framework of the government and partner with banks and other financial institutions to invest more in the provision of affordable housing where the housing deficit is prevalent”, he stated.
Mr Asenso-Boakye reiterated that “it is only through this that we can reach out to the majority of our citizens and positively affect the lives of the larger population.”
Source: Richard Mensah Adonu | Join our Telegram Group
