Solving the Housing Deficit




As I strolled in the serene and beautifully picturesque Airport Hills gated and resort-like residential community, currently the most affluent neighborhood in Ghana with an official of Finali Limited, developers of Airport Hills Estate, I was quickly teleported into Wisteria Lane of the popular television show, Desperate Housewives. I felt like I was not in Ghana. I could hear silence, which was only occasionally broken by the chirping of birds and rustling of wind through the leaves of trees.

My enchanted awe was abruptly curtailed when I saw industrious workers weeding, mowing and watering gardens as well as constructing aesthetically appealing buildings. I quickly realised the disparity in the housing situation in Ghana. The real estate company is contributing towards solving the housing shortage for a select group. The carpenters, masons and other menial workers who labour at the community would return home without a place to lay their heads. Some of them live in slums, kiosks and uncompleted buildings, while others lodge with relatives. They do not have houses of their own. Nonetheless there they were, completing million-dollar houses for the affluent.

There is no shortage of houses in Ghana. There is an oversupply of expensive upper and middle class houses, which only the rich can afford. Middle East and North Africa (MENA) countries are experiencing the same situation. “While there is currently an oversupply of upscale or luxury housing in many markets, there remains a shortage of more than 3.5 million affordable dwellings across the major markets within MENA,” said international property agent Jones Lang LaSalle in a November 2011 study.

Government-led affordable housing projects are not really that affordable to even middle income earners. The poor majority cannot buy an average home. The yawning disparity impels the provision of adequate and suitable affordable housing for the middle and the lower classes. It goes without saying that housing is a crucial sector that plays an essential role in the sociopolitical, cultural and economic development of every country. As the existing stock of housing units in the country is inadequate, the sector suffers from fragmented, uncoordinated and unsustainable efforts from individuals, private developers and successive governments to supply relatively affordable housing. This lack of concerted effort has culminated in a huge housing deficit.


Two million dwelling stocks

The estimated housing deficit, according to the 2010 Population and Housing Census, is over two million (2,074,391) dwelling stocks. The Ministry of Works and Housing put the housing unit deficit at 1.7 million in 2014. This means that as much as over two million housing stocks should have been provided as at 2010 in order to meet the deficit. The 2010 census also recorded a population of almost 25 million, showing that, on average, at least 1.5 million houses could have solved the housing conundrums in Ghana. The 2012 housing sector profile estimated that Ghanaians would need 5.7 million new rooms by 2020 and this supply can only be met if 3.8 new rooms are completed in every minute of every working day for ten years. This is a great challenge – one unlikely to be met.

The 2010 census estimated the average household size as 4.4, with about 51.5 percent of these households occupying a single room in a compound house. An estimated 1.61 households occupying one housing stock in a system where majority of housing stocks are single rooms. It suggests that on average seven people occupy a single room in Ghana. According to the most recent Ghana Living Standards Survey (2008), 62.9 percent of urban households sleep in single rooms. This is below the Habitat for Humanity standard of three rooms per household. It is important to note that the 2010 census survey defined housing to include separate houses, semi-detached houses, flats/apartments, compound houses, huts, tents, kiosks and containers. Admittedly, tents, kiosks and containers which are makeshift dwelling units are normally not classified under housing, and so technically, should be ignored. The makeshift dwellings such as tents, kiosks, containers and attachment to shops or offices together constitute 2.0% of the total housing stock, per the census. The housing stock provided in Table 1 is even less when these sub-standard and temporary make-dos are removed.




There is an uneven distribution of houses across the country as indicated in Table 2, with an arithmetic increase in the provision of housing against a geometric rate increase in the population. Total number of houses as at 2010 compared with a number of households indicates an acute overcrowding in most houses. As also shown in the data, on average, there are about 7.3 persons living in each house. Ashanti region recorded the highest percentage of housing stock in the country (16.9%), corresponding with its high population. Although the Greater Accra region recorded a lower share of housing stock (14%) comparatively, its urban share of housing stock was about 80 percent. As it has already been shown, the average household size in Ghana is 4.4, with persons with about 1.6 households per house, and a total of 3,392,745 housing units nationwide. So given the inter-census population growth rate of 2.7% per year, it is projected that Ghana’s population could reach 32,186,724 by 2020. This implies that a total of 6,303,919 housing units will be required to meet the population’s demand for housing by 2020, assuming a constant household per house ratio of 1.6.


What Must Be Done?

Some data indicate that 44.5 percent of households occupy only one room, 24.8 percent occupy two rooms and 11.65 percent three rooms. The statistics also shows that more than half (54.4 percent) of household members sleep in single rooms, 24.3 percent sleep in two rooms and about 10 percent sleep in three rooms. Only 11.2 percent of households sleep in four or more rooms. According to experts, with every 1.61 household occupying one housing stock, and the majority of these stocks being single rooms, there is averagely seven people occupying a single room.

According to Dr. Frank Ametefe, a real estate and planning lecturer, an estimated 199,000 housing units are required annually to address the deficit in five years, but the actual delivery is only between 25,000 to 30,000 units. It is mostly provided by the informal sectors. Dr Ametefe advocates concerted efforts and policies such as public private partnerships (PPPs).

The past governments’ attempts to provide affordable housing alone were woefully inadequate, or ended in a fiasco. The Kufuor-led New Patriotic Party (NPP) government sought to reduce the housing shortfall by building about 20,000 affordable units in 2001 for civil and public servants. In 2007, the construction of about 4,500 units ranging from bed-sitter, single and two bedroom apartments had begun at Borteyman and Kpone in the Greater Accra region, Asokore Mampong in the Ashanti Region, the Akwadum site in Koforidua in the Eastern region, and Tamale in the Northern region. All were to be completed by June 2009. Unfortunately, not a single unit has been completed. Now, most of the sites have been taken over by squatters.

This project was discontinued by the National Democratic Congress (NDC) government in 2009. President John Atta Mill’s administration signed a controversial deal with a South Korean company, STX, for the construction of 30,000 housing units for government security personnel at a cost of US$1.5 billion. That deal has since floundered. Mid-last year, Water Resources and Works and Housing Minister Collins Dauda announced that there would be 9,120 housing units built after a deal was struck with Credit Suisse and Barclays Bank for a US$400 million loan for the project. A total of 5,000 units were to be built by Brazilian company Construtora OAS for US$200 million. The remaining 4,120 were to be constructed by Ghana’s ItalConstruct International for a total cost of US$200 million.

In an interview with Mr. Raymond Kugblenu, Director of Estate and External Affairs of Finali Limited, he opined that there is no way any private real estate company could provide affordable houses without government participation. “As for the housing for the upper class and some middle class people with high purchasing power and disposable incomes in our society, there are always plenty of houses to meet their needs. But for the ordinary Ghanaian, civil servants and other people in the lower income bracket, only the government can currently provide affordable housing for them,” Mr. Kugblenu told GB&F exclusively.


Most expensive area in Accra

Mortgage companies estimated that most households in the country could only afford houses with prices ranging between US$10,000 and US$18,000. Mr. Kugblenu explained that no real estate developer could construct a house for such low prices because the real estate industry is driven by location, the type of development and quality of finishing. “Going by these three factors an average house price in Accra was GHc 315,000 (US$86,957) in mid-2013, about 12% higher than in the rest of Ghana.

The most expensive area in Accra is the Airport Residential Area, with average house prices of GHS 950,000 (US$262,250). Other expensive areas in the capital include East Legon with the average home costing GHS 800,000 (US$220,842) and Spintex GHS 600,000 (US$652,632). The least expensive houses in Accra could be found in Madina, with averages price of GHS 200,000 (US$55,211), followed by Kwabenya and Abokobi, with average house prices of GHS 245,000 (US$67,633) and GHS 210,000 (US$57,971), respectively,” he said.

Mr Kugblenu stated further that in the rest of Ghana, house prices remained cheap, at an average cost of GHS 280,000 (US$77,295) over the same period. In Kumasi, the average price of a house stood at GHS 220,000 (US$60,732) in mid-2013. In Sekondi-Takoradi, the average house price was GHS 180,000 (US$49,690) over the same period. Cape Coast has the least expensive houses in Ghana, at an average of GHS 120,000 (US$33,126).

The 2010 census revealed that nationally, 47.2 percent of dwelling units are occupied by their owners, 31.1 percent are rented out and 20.8 percent are occupied rent-free. In addition, 52.7 percent of dwelling units are owned by household members, while 26.3 percent are owned by other private individuals. Another 15.6 percent are owned by relatives who are not household members. Only 3.7 percent of the dwelling units are owned by employers (public and private).

Mr. Kugblenu said the factors that contribute towards the rising house prices are beyond the real estate developers. “There is cheap and available labour in Ghana and the corporate tax rate for companies in the real estate industry is 25%, quite low when compared to some other African countries. This should have encouraged people to invest and develop affordable housing but there are serious challenging factors such as high cost of land as a result of our land tenure system and its attendant acrimonious litigations, lack of access to sustainable finance, high interest rates, high and unstable cost of building materials and the absence of a clearly defined national housing policy,” he said.

What should the government do to help the real estate companies to build affordable houses? Mr. B.D.K. Adu, former Greater Accra Regional Chairman of Ghana Real Estate Developers Association (GREDA) and Chief Executive Officer of AWET Group, said the government should release all the vested lands in its possession to GREDA at a low-cost, construct accessible tarred roads, and provide water and electricity to proposed building sites. Mr. Adu wanted the removal of taxes on cement and other building materials and the offer of soft loans to estate developers to stabilise price fluctuations. “We in GREDA have told the government many times that they should give us the land banks, take care of sites and services, offer soft loans and remove punitive taxes on buildings, and we shall build houses that will cost almost half of the current prices being quoted. We are very capable of building affordable houses for ordinary Ghanaians but the government seems not willing to forgo the land banks and taxes,” he said in a GB&F interview.


Experience has shown

Mr. Adu, a former Member of Parliament for Okere, said experience has shown that when government teams up with GREDA or private developers, they could build affordable houses. “GREDA provides about 2,500 housing units annually, other than that the housing deficit would have quadrupled. SSNIT should be commended for providing houses in conjunction with GREDA. It has been quite a success,” he intimated. The records show that governments and the private sector have collaborated to increase the housing supply. Some of the projects include the establishment of companies like the State Housing Company, SSNIT, Home Finance Company, First Ghana Building Society and the GREDA. However, the efforts of these entities are, so far, not enough.

Mr. Simon Ofori Ametepey, a realty specialist, said the governments and stakeholders have to look beyond the short term in formulating housing policies. It is most effective when the commitment is long term, independent, and support is bipartisan. “To be successful, government should shift focus on full direct housing construction to that of providing the enabling environment for the sector. For example, if there is the need to import housing materials, government can subsidise this by importing or reducing the import duties on building materials. The establishment of small- and medium-sized companies that export, manufacture and coordinate the distribution of building materials will greatly enhance housing delivery. In all, a workable national policy framework in which the duties and responsibilities of each stakeholder in the delivery of housing should be stipulated to assist sustainable public and private housing delivery,” he noted.


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  1. Terrific piece Mr. KWEKU DARKO ANKRAH. Question though…can you please provide the source of the “some data” you mentioned in the paragraph below? Thanks.

    What Must Be Done?

    Some data indicate that 44.5 percent of households occupy only one room, 24.8 percent occupy two rooms and 11.65 percent three rooms. The statistics also shows that more than half (54.4 percent) of household members sleep in single rooms, 24.3 percent sleep in two rooms and about 10 percent sleep in three rooms. Only 11.2 percent of households sleep in four or more rooms. According to experts, with every 1.61 household occupying one housing stock, and the majority of these stocks being single rooms, there is averagely seven people occupying a single room.

  2. Oh and please were are Tables 1& 2 as referenced in the quotes below:

    “The housing stock provided in Table 1 is even less when these sub-standard and temporary make-dos are removed.”

    “There is an uneven distribution of houses across the country as indicated in Table 2,…”

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