Re: Ghana's luxury building boom:

A pool with a view

After months and months of self-imposed restraint on commenting on issues regarding my beloved country, Ghana, I seemed to be forced out of my hibernation by the BBC report of May 21, 2013 (Available at:

http://www.bbc.co.uk/news/world-africa-22607173 ), which suggests Ghana’s economy as the fastest growing economy on the African continent with a bourgeoning construction industry. Coming on the back of earlier reports (specifically the 2011 Economic Watch report) that placed Ghana as the fastest growing economy in the world in 2011, it is not only heartwarming, but it also gives us, proud Ghanaians, something to show to skeptics about the African story. Something positive is happening somewhere!

But as we celebrate her success story, the hard facts should not be lost on us. How many of the “Gladyses” in the BBC report has the Ghanaian economy been able to churn out in the last two decades who can afford a luxury building with a rooftop pool that offers a panoramic view of the city? From the Ghana Government’s own website, we are aware that Ghana currently is in deficit of 1 million houses, which will easily translate into over 5 million people out of her 25 million population either not housed or poorly housed (Available at: http://www.ghana.gov.gh/index.php/information/speeches/5739 ). The effects of that are seen translating into exploitative rental contracts around her urban centers, where the shortages are most visible with dire consequences for tenants and prospective tenants.

I remember ex-president J.A. Kufour initiated a parliamentary level move to outlaw rent advances in Ghana to restore some level of sanity in rental contracts and agreements. But the problem can never be the poor landlord who is a product of the Ghanaian economy – he or she must only be seeking ways to maximize her economic opportunities, as done by the politician, the journalist, the market woman and just anyone else. Kufour and his men must have failed to appreciate the age-old basic economic concept of demand and supply – supply more and demand will be eased and the obverse is applicable, too. I am glad that that initiative did not see the light of day, as its potential to have driven the trade into the black market was apparent with dreadful consequences.

Following closely on the heels of the foregoing unsuccessful initiative by the Kufour administration, a new government was borne in 2009. It promised to construct 200, 000 housing units to be spread across the country to eases the housing deficit. But what came out of the so-called STX housing project is not only pathetic, but an abysmal failure which can be quantified in loss of man hours and investment in initial negotiations and planning.

Turning to the economy, it should be clear to observers and pundits of the Ghanaian economy that the poor decisions made by successive governments with regard to the economy are just beginning to manifest in the widening gap between the rich and the poor in Ghana. The BBC reporter talked about the middle-class in Ghana and one wonders what percentage of the Ghanaian population would be regarded as middleclass and what is their purchasing power, so they could afford the kind of luxury that is being showcased to the rest of the world.

Here is the bald truth. Being a Ghanaian, the so-called growth that is being attributed to the Ghanaian economy must be reexamined from the perspective of Gross National Product (GNP), not the current calculations based on Gross Domestic Product (GDP). Considering that most of the growths in the Ghanaian economy in the last decade or recent years are not from the manufacturing and production sectors of the economy, but from the extractive industries, we must go beyond the GDP analysis to consider the income that actually accrues to the ordinary Ghanaian in all these so-called growth.

If your telecom industry is in the hands of foreigners, investments in oil are supported by foreign capital, you get back only 5% out of every US$100 dollars of gold that is extracted, you must understand that when you apply GDP accounting matrixes in determining growth, growth will be evident. But when the shareholders who are smoking pipe on the rooftops with a panoramic view of the capital repatriate the returns from their investment to their countries, it leaves your country and your countrymen dry. Let us resort to other measures to determining the true state of existence of the average Ghanaian than this distorted GDP analysis that does not paint the true picture of what is happening in Ghana.

The questions are: could we have fared differently if local investment was sought for most of these projects? Was it possible to mobilize local financial resources in support of these projects? Did leadership considered the Ghanaian as a dependable partner? Is it too late to start correcting some of these leadership failures?

Prosper Yao Tsikata