With almost all mortgages pegged to the US dollar, against the cedi’s erratic nature many a Ghanaian worker can only dream of owning their own homes.
Servicing a dollar-rated mortgage means having to part with more cedis every month whenever the cedi depreciates against the dollar, a situation that badly affects fixed income earners in particular.
But government says all that is about to change as it is working on a GH¢1bn housing fund, together with a number of banks, to provide cedi-rated mortgages.
The banks include GHL Bank, Stanbic Bank, GCB Bank, Republic Bank and NIB, and their charge is to provide low-priced local currency mortgages and housing finance to workers and real estate developers.
“The National Mortgage and Housing Initiative is being piloted in 2018, and with the potential for the launch of an about-GH¢1billion housing fund over the next five years,” Finance Minister, Ken Ofori-Atta, said when he inaugurated a Board of Directors for the National Pensions Regulatory Authority (NPRA) – which he expects to support the initiative.
“As part of the pilot, GH¢40million has been established and five banks – including GHL Bank, Stanbic Bank, GCB Bank, Republic Bank and NIB – have been selected to work with government to deliver cheaper local currency mortgages and housing finance to Ghanaian workers and real estate development firms,” Mr. Ofori-Attah said.
Unconfirmed data suggest the country has a housing delivery deficit of about 1.7 million units, which is projected to reach about 2 million by the end of 2018.
Pragmatic policies, many believe, are required to reduce the deficit and enable more Ghanaians have access to decent accommodation.
The Finance Minister said government sees the provision of affordable housing as being key to providing social equity and anchoring a firmer social contract between citizens and government.
The housing fund, together with a well-regulated pensions industry, would enable most workers to use their tier-2 and 3 contributions to acquire homes, he said.
He therefore tasked the NPRA, regulator of the pensions industry, to support the initiative by creating avenues that will allow funds to invest in mortgage-backed securities and long-term securities.
“The NPRA is expected to support this initiative by enabling banks and key stakeholders to issue mortgage-backed securities, as well as to ensure that contributors easily use their tier-2 and 3 as equity for the purchase of homes if needed.”