A group of private sector practitioners and the Government are currently discussing the construction of a modern city in the lower Western Region to support the industrialization strategy articulated by President Mills in the second State of the Nation Address.
The proposed city, besides supporting the petrochemical industry, is expected to become the best practice urban landscape by which other cities and urban towns in Ghana shall be benchmarked.
According to a statement released by Charles K. Boakye, Chief Executive of Infrastructure Systems, one of the promoting agencies, the overall long-term flagship program involves the preparation of ambitious urban master plans that will transform parts of the lower Western Region into world-class cities affording residents the highest quality of life. Two cities shall be developed, one at a time, over a period of 15 years, and balancing demand with supply. The program will target urban communities between the Pra and Tano Rivers, namely Cape Three Points, Princess Town, Axim, Asiama, Nkroful and Half Assini among others, after consultations with the Western Regional House of Chiefs, development professionals and the people. Tullow Oil, as part of their corporate social responsibility, is financing the preparation of structural plans for some of these towns.
The first city will be designed to accommodate a maximum population of two million, while the subsequent city to commence after 2016 shall hold up to one million people. With China building 220 cities over a period of 20 years, it is reasonable and feasible for Ghana to target 20 cities throughout the country using planning and financing strategies similar to that adopted in China.
The city project anticipates investing about US$15 billion for new industries and world class ground infrastructure in transportation, telecommunications, electricity, water supply and sewerage systems. Eventually, other investors will be invited to support construction of a deep sea port, airport, real estate, convention centres, etc.
Prior to commencing infrastructure construction, inflows and receipts from land leases will be channelled towards financing key industries that would support infrastructure delivery; an integrated iron and steel processing plant at Oppon Manso, a cement plant at Nauli in Nzema, an alumina processing plant at Awaso, a glass plant at Asiama or Aboso, and oil and gas-based industries. The plan takes due cognisance of tile manufacturing industries, tapping into available large clay, limestone and granite deposits, and also crediting mining tailings from old mining towns as aggregates for real estate and construction works.
“If you understand how money works, you should understand how we shall raise the money”, says Mr. Boakye, responding to concerns regarding how the money will be raised. Targeting an initial prime area of 200 square km (20km X 10km) or 20,000 hectares, equivalent to a third of the land area of Accra, an amount of $15 billion will be raised and invested in the city over 8 years. Half of this amount will be raised from land financing, and the rest through a credit system, bonds and stocks, microfinance, equity holdings and direct foreign investment. Loans shall be contracted only when necessary, bearing firmly in mind that the only legitimate reason for taking on debt is to create wealth. And the Government has indicated the World Bank wants to be part of the program.
“Money alone does not build nations; visions, strategies and ideas do. We are going to use money, credit system, land financing and mineral security to build our city,” said Mr. Boakye, an Economist and a former Senior Municipal Engineer of the World Bank. “If it has worked elsewhere, it should work in Ghana, and the State must take an active part in this.”
“We shall target the high end of the market as the success of the first project is very important. Real estate firms, oil industries, financial institutions, services industries, Ghanaian expatriates and ordinary residents are all potential clients. If we don’t build cities expected of an emerging oil industry, oil company staff will depend on neighbouring countries, where better infrastructure could be assured”, added Mr. Boakye.
The cities shall benefit from massive investments in infrastructure and manufacturing facilities, with world-class enclaves for medical, sports, cultural and eco-tourism facilities, underpinned by significant economic and employment generation activities. The Kundum festival will be marketed as an international phenomenon, a key activity on the country’s tourism calendar. A Sports mini-city will be an integrated settlement where one can live, work, learn, play and watch sports, offering a year round calendar of sports and entertainment. Featuring leading sporting academies, state-of-the-art facilities, the enclave will promote sports tourism and become Ghana’s most active lifestyle community.
A Building Materials mini-city, marking the beginning of astounding growth in Ghana’s real estate industry, will be designed to aggregate companies that manufacture building materials such as tiles, steel and aluminum products, plastic and plumbing products, timber veneer and furniture, electrical and cabling products, ironmongery and glazing products, household appliances, etc. .
An Industrial growth zone equipped with superior facilities for light and medium industries is planned to provide functional, efficient and independent designations assigned to a wide range of manufacturing and assembling supplies and services, for example, pharmaceutical, electronics, automobile, etc. The zone will also provide a logistics park perfect for storage and warehousing.
Steel, glass and aluminium skylines will be the strongest part of the city’s brand, like any 21st century city. The new city will be properly equipped to host major international institutions and agencies, research bodies, and multinational corporations that have turned away from Accra due to inadequate infrastructure facilities. When we build and build them right, they will come. Focusing attention on the new city will reduce pressure of development in Accra, enabling policymakers to systematically redesign and regenerate Accra into a world class national capital.
Land financing
Land financing is a major component of the funding mix for the development of the Western Region cities programme. The main attraction of this approach is the upfront generation of funds which reduces the burden of borrowing. Land developments will be priced to reflect the costs of accommodating growth. A publication by George E. Peterson of the World Bank titled – Land leasing and land sale as an infrastructure-financing option - demonstrates how several cities have carried it out. For example, Shanghai city authorities raised more than $100 billion for its makeover programme, about half the needed investments. Cairo raised $4.57 billion from sale of 5400 hectares of desert land without financial cost to Government. In Mumbai, $1.2 billion was obtained from only 13 hectares. More recently, several billion dollars were raised in Cape Town, Bangalore, Khartoum, Luanda, Bogota and Istanbul from land leases to finance infrastructure.
Long-term leasing of a third of 20,000 hectares (200 square km) is projected to generate an estimated $7.5 billion over eight years. World class cities require world class infrastructure and the higher the quality of infrastructure, the higher the land value. It is expected that infrastructure investments in the enclave will drive up prices, and as the land values overtake the investments costs, the public budget also will share in these land value gains.
The most reassuring statement supporting this strategy was made by Awulae Annor Adjaye III, Omanhene of Western Nzema Traditional Area, “...the Chiefs and people of the Western Region will not sell their lands but use them as equity in future investment programmes.” The State is expected to establish a legally empowered Asset Manager to hold assets on behalf of land owners, and the youth of the respective areas will be given the first chance in job opportunities.
Quality employment
The solution to the problem of unemployment is industrial development. Industrialization is the only policy directive that will ensure quality employment — promoting the development of different employment categories, from highly skilled white-collar to blue-collar factory jobs, and sustain growth. Ghana has some of the finest architects, planners, engineers and other construction professionals who will be challenged to lead the programme, with support from international experts as needed.
The massive real estate facilities anticipated will require a buoyant construction sector, which is a prerequisite for the success of the programme. Contractors, construction personnel and consultants are the bedrock of the modernization programme. The Government will be supported to develop real estate laws and improve contractors classification systems, design effective monitoring and evaluation mechanisms to measure the performance of contractors, and establish a body through an act of parliament to regulate the construction sector. Estimated temporal and permanent employment openings for the first phase will exceed half a million by 2016, including thousands of construction-related occupations such as construction managers, electricians, carpenters, bricklayers, plumbers, tilers, etc. The Government is expected to drive national awareness of the importance of skilled workers in building the nation’s economy and send the message that careers in the skilled trades will be plentiful, lucrative, and fulfilling.
New laws to catalyze development
New legislation required to support the programme will be enacted and new institutions incubated. These include: (i) the Western Region Cities Development Authority, (ii) National Credit Act, (iii) Infrastructure Development Bank Act, (iv) Integrated Iron and Steel Authority Act, (v) Aluminum Authority Act, (vi) Cement Commission, (vii) Land and Equity Act, (viii) Tile and Natural Stone Commission, etc. The Railway Development Authority Act is already in place and the Government will be supported to develop a world class railway system, a source of pride for the nation. It is expected that the growth of the industrial economy will strengthen the agriculture, services, knowledge and innovation economies; and increase the competitiveness and productivity of the public sector. The purchasing power of public sector staff should be increased to enable them purchase assets in the expanded economy.
A better Ghana
It is expected that the combination of land financing, secured credit systems, quality infrastructure, buoyant private sector, expanded market, plus high rates of return on investment and large potential inflows of foreign capital shall ignite a self-reinforcing cycle of investment, development, and more investment that will signify the birth of Ghana’s economic boom. The institutions, structures and industries that will be created will help generate numerous productive jobs, and permanently raise the productive level of the Ghanaian economy.
World-class cities are not built overnight, but if not started today, they will never become a reality. In city design, good things do not happen by accident; they are planned. Our new city will shape the character of future generations to come. Hopefully, our descendants will look back proudly from the beautiful new renaissance cities the nation has built, at our humble efforts in these times in the midst of the greatest global crisis mankind ever faced, with gratitude that we were able to give each one of them and their children, everywhere in Ghana, the opportunities to live lives worthy of the sacred creations of God.
We shall not have the moment again if we let this chance slip by, if we let the beautiful lands in the lower western corridor develop into slum settlements, the statement concluded.
Charles Kwame Boakye
kboakye@infrastructureghana.org
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