When Did The Word “Affordable” Vanish Out Of This Deal??

Fri, 12 Mar 2010 Source: Boadi-Danquah, Eugene

Let’s start with some sequence.

Wednesday, 29th October 2008, Kofi Annan lCT Centre, Accra: Panel of questioners concerned about the widening income gap discrimination, especially to do with property ownership in our country. How could we get our lower classes to also own decent homes?

Answers: Government must intervene by making housing “AFFORDABLE”.

Tuesday, 3rd January, 2009. E.C Offices, Accra: Coincidentally, the candidate who expressed the gravest passion towards low income earners and promised to make housing “AFFORDABLE” by improving research into the use of local materials, etc is declared winner and President!(Joy for poor people)

12th September, 2009: Ghana signs Housing deal with South Korea, to provide 200,000 “affordable” units. What a relief to researchers at BRRI. Their years of research into clay pozzolans etc officially ends with big pause. Korea is to utilize their own precast elements, employ their own workers up to 70% of the workforce, and hopefully get some 30% cheap labour from Ghana.

12th September, 2009: Ghana agrees to provide land free of charge, and pay for 90,000 units in advance, to reassure South Korea STX of our commitment as a country to assist them financially to strengthen their financial position. (Read: http://www.koreatimes.co.kr/www/news/biz/2009/12/123_56972.html) According to the Korea Times, STX were not doing too well at the time, but according to ghanabusiness news, they were in a healthy position. That would not be the 1st time we award contracts out of sympathy. Oh! Ghana! Paying upfront for something we hadn’t seen?

26th February, 2010: After Albert Abongo, who spearheaded the deal, is removed from office, panic sets in and a while after Deputy High commissioner of South Korea, calls on Hon. Alban Bagbin, to reassure himself that the deal struck with them still holds.

8th March 2010: Aide to the Vice President says that Project was being financed by the Government of South Korea. (Remember that initially, STX were doubtful about Ghana being able to honour its part of the contract, and so signed for upfront payment?, now their own Bank was pre-financing the project-(I will explain to you later) According to Abu Jinapor, EXIM bank of South Korea had always wanted to assist Ghana, but there were some bottlenecks with us going HIPC so they couldn’t help us. (GREAT!!, I believe that.)

Finally, 9th March 2010, Accra, Ghana: Project is no longer called “Affordable” Housing Deal, it is now called “Housing Deal”, the word affordable makes it a mouthful, so do the people who constitute the group demanding it. It is not going to start off as a project aimed at getting the Pupil Teacher at Akyem Asene L/A school afford a decent home in Akyem Asene, to discourage her from coming to seek non-existent greener pastures in Accra. It will not kick off with the urgency of giving the young Nurse in Damongo, a chance to consolidate her stay in her peaceful Rural Area, or attract others to go there. No, it begins with 300 “executive” houses in Tema for members of Parliament and Government officials. It will have an 18-hole golf course and a multi-purpose Sports centre. In addition with 5000 “PUBLIC” housing for those supposed to keep Politicians safe. The next phase will be specifically aimed at “Middle-income” earners, according to the Vice-President.

Moral of the Story: If you are a Public Sector official or low-income earner, who felt too excited about something that you could afford in the short to medium term, and are not resident in Accra, or considering moving there to contribute your quota to the congestion of Accra; then you might just want to consider pulling yourself up by your bootstraps. You could as well wait for phase 3, but do not hold your breath. It will be a very long time before real development is weaved around non-Accra dwellers. Sorry, but Politicians live in Accra plus the 70% Korean Workers will not be too keen to work there, and it would probably be too costly for them transporting their materials there.

Realities of the Story: The Government of South Korea is not putting in a Pesewa in this project as we believe. It is easy to convince a weak brain about this, but when doing business on a Global scale, appending your signature to a contract that cements your commitment to purchase everything that someone is building is not too different from giving them cash. Please forgive me if I am wrong, but, is that not what the accounting people call “receivables” or something under current assets?

On a brighter note: The estimates of the Korean Group are not through the roof as perceived to be, they are using their own precast manufacturers, and having to ship units from South Korea to Ghana. In addition, they will be employing mostly Korean artisans, whose pay levels are significantly higher than ours. STX, together with most Korean precast manufacturers have been hit hard by the global economic meltdown and need to be stimulated. I will be unfair to consider whatever excess costs we incur by choosing them to deliver what we could for ourselves as a rip-off, it is not! It is just “opportunity cost”, the price we will pay always for not cherishing our own, or believing that the white (sorry yellow) man has some Magic.

When did a deal to provide affordable housings, suddenly turn into “executive houses” for politicians and units aimed at the middle-class? When will the cement factory be set up in Ghana caught up in http://www.ghanabusinessnews.com/2009/12/14/south-korea-company-stx-group-to-establish-cement-factory-in-ghana/ as promised?

Let’s all debate as usual, no NPP/NDC, just Ghana.




Columnist: Boadi-Danquah, Eugene