Business News of 2013-12-23

“Look inward to bridge housing deficit”

Government must look inward and begin to pool the resources and expertise of professionals in the housing sector to bridge the country’s growing housing deficit, Dr. Ken Kwaku, an economist and board chairman of McOttley Holdings Limited, a financial services and real-estate group, has said.

“There is a major deficit in housing in the middle and lower end in this country. We don’t need the big foreign investors and all that. We can build our own homes,” he said.

“Why must a Ghanaian who earns a salary build a house one brick at a time? The financing must be there; we need to expand the mortgage market,” he added.

The current housing-deficit is estimated at 1.7 million units with an annual growth of 70,000 units, and about 50 percent of the country’s 25-million population is said to live in sub-standard housing or other unsuitable structures. However, it is possible to narrow the gap by using internal resources and expertise, Dr. Kwaku said.

“There is money in this country. If we stop importing everything that we need to build with, we should be able to build affordable two- or three-bedroom houses. We must integrate the findings of institutions like the building technology department of the Kwame Nkrumah University of Science and Technology (KNUST) and other research institutionsinto a national building-plan.”

He also added that: “GHACEM is producing top-notch cement but we are allowing poor quality imports into this country. We are using poor imports. We have the intelligence, the expertise, and funds within this country to begin to develop an affordable mortgage market.

“We also use too much cement and concrete in our building. There is a lot of innovation and ingenuity that can come into construction in this country.”

Successive governments have attempted to address the widening housing deficit, but the efforts have been patchy with minimal results. The affordable housing project started under the former administration is yet to be completed, and the US$10billion STX deal between the government of Ghana and STX Korea -- which was to deliver 30,000 housing units to the security services in its first phase -- was also abrogated due to boardroom wrangling between STX Ghana and its Korean counterpart.

Dr. Kwaku, who is a former World Bank economist and special adviser to the Tanzanian government, said: “We have to find affordable capital that makes sufficient margin for those risking capital but still affordable on the demand end. It’s easy to cost this; there are professionals here who can do that”.

McOttley Holdings Limited was incorporated as a limited liability company in April this year. The company is authorised to provide financial and managerial services to its subsidiaries operating in the areas of investment banking, real-estate development, and providing loans to small- and medium-scale enterprises (SMEs).