Mid-Year Budget Review: Building contractors urge government to remove duties on building materials

The President of the Association of Building and Civil Engineering Contractors of Ghana (ABCECG), Mr. Anthony Klutsey, has urged the government to remove or significantly reduce duties and other levies on building materials to lower costs.

He wants the government to use the mid-year budget review presentation slated for Tuesday, July 23, 2024, to implement the proposal.

Mr. Klutsey emphasized that the high prices of these essential products are obstructing the government's affordable housing initiatives and individual homeownership efforts. Additionally, he highlighted the urgent need for the government to pay contractors' arrears and implement well-targeted affordable housing schemes.

Speaking in an interview after an emergency National Executive Meeting of the Association, Mr. Klutsey stated that the cost of building materials has reached crisis levels.

He noted that research indicates that approximately 30% of the cost of cement, iron rods, and other critical building materials is due to taxes and levies imposed by the government.

He explained that removing these taxes and stabilizing the cedi are crucial actions that can significantly reduce the prices of building materials and maintain them at lower levels.

“In the past, building materials were tax-free in Ghana, resulting in relatively low housing costs. However, the current situation is dire with numerous taxes imposed on these materials. The government needs to act swiftly to save the industry and its affordable housing initiative,” he stressed.

Mr. Klutsey emphasized that without reducing the cost of building materials, the government's affordable housing plans would remain unattainable.

“Investors in affordable housing projects will walk away if building costs put houses beyond the reach of many workers,” he added.

He also criticized the concentration of affordable housing projects in Accra, noting that it is self-defeating. He argued that affordable housing projects should be decentralized to the districts, allowing those who truly need affordable housing to access them.

“Placing affordable housing projects in Accra, Kumasi, and other cities only benefits the wealthy who buy additional houses. We need to decentralize these projects to the districts and price them appropriately to attract those in need,” he said.

Mr. Klutsey also lamented the perennial problem of delayed and non-payment for completed projects, causing significant hardship for contractors, some of whom have suffered serious financial and resultant health challenges. He urged the government to urgently pay all outstanding arrears and to only award contracts when there is money to finance them.

The ABCECG President expressed the Association's willingness to engage with the government to find sustainable solutions to the myriad problems facing the construction industry. He noted that addressing these challenges could absorb many young people into decent jobs, thus alleviating youth unemployment.

He, therefore, urged the government to pay attention to these issues to prevent them from escalating into a national crisis with potential consequences for national security.

MA/NOQ