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From the Executive Director
Posted on : October 6, 2009
How To Build Three Million Houses By 2025

October 5, was World Habitat Day, a day set aside by the United Nations to reflect on the state of our towns and cities in general and the basic right of citizens to shelter in particular. It was also intended to remind the world of its collective responsibility for the future of the human habitat.

The United Nations chose the theme — Planning our urban future — to raise awareness of the need to improve urban planning to deal with challenges of the 21st century. The Institute for Infrastructure Development is taking advantage of this occasion to explain how Ghana can deliver three million houses by 2025.

From the report of the 2000 population and Housing census, Ghana has 3.88 million dwellings and 3.7 million households. The census report projection indicates that from 3.7 million households in 2000, the number of households will increase to 6.0 million by 2025, growing at about 1.97 per cent per annum, which is less than the rate of population growth – 2.7 per cent.

The report continued that given an assumed dilapidation rate of three per cent per annum for the existing houses, the actual number of dwelling units needed to take care of new households and at the same time replace the dilapidated ones is four million or an average of 160,779 additional units per year.

To date, Ghana has only managed to construct about 41,000 houses per year, or a total of 370,000 since 2000. This leaves an annual deficit of 120,000 each year over the past nine years, or a total of one million as of 2009. Therefore out of four million houses, Ghana has constructed only 370,000, and 3.6 million more is needed for the next 16 years.

The analysis in the census report is simple and straightforward. The document used the term dwellings for the structures instead of houses. Almost 60 per cent of the dwellings in Ghana do not qualify as houses, let alone homes. Philip Moffitt, the founder and president of New Life Balance Institute, a think tank in California said “A house is a home when it shelters the body and soul”.

Fifty-two per cent of the dwellings in Ghana are made up of —
(i) wooden structures like that seen at Sodom and Gomorrah in Accra,
(ii) mud houses like what got washed away during the floods in many of our villages,
(iii) kiosks, metal containers and other temporary structures commonly found in the cities and rapidly developing urban areas like Ashaiman. The report stated that 1.9 per cent of all dwellings are shops and containers, a whopping 74,000.

There is great demand for houses yet the country has left the sector too longer than public policy could allow. It is not surprising that this country has low indicators on facilities related to a home.

For example, according to the Little Data Book on Information and Communication Technology published by the World Bank 2009 edition, Ghana has lower percentage access for telephone lines, Internet subscribers and personal computers than Senegal, Equatorial Guinea, Kenya, Gabon, Cote d’ivoire and even Gambia. The only facility we scored better was access to the television set.

The reasons are not far-fetched. Apart from the telephone set that can be installed in any structure, telephone lines, Internet and the PC cannot just be installed in any structure at all. These facilities are housed in better structures that are largely inadequate in Ghana. On the other hand, Ghana scored well in the number of mobile phones per subscriptions, which is not entirely a home-based facility. This clearly shows there is a huge Potential to develop the housing sector.

In the non-ICT sectors, poor planning and housing situation are some of the causes of the waste management problems in our cities, high water losses of 50 per cent, high crime wave in our cities, poor accessibility in the neighbourhood, low revenue from property rates, etc. The state of the housing sector is one of the reasons why seventy percent of Ghanaians do not have toilets, and Ghana is rated the second country with poor sanitation access in Africa.

I have taken time to highlight some of the challenges we face as a nation. The housing situation in Ghana is that bad, no wonder the social cohesion and moral integrity of the populace are fast slipping.

Andrew Johnson, a former president of the United States said “without a home there can be no good citizen, with a home there is no bad one”. Good housing ensures that citizens sleep well, and think better for themselves and the nation, and help to innovate. A good house is not only a status symbol, but also a symbol of security and inheritance.

All over the world, the housing and Real estate industries were at the backbone of the economic transformation of nations. It was not surprising that the collapse of the housing market triggered the current world economic meltdown. A house is the largest investments most individuals make in their lifetime. Housing brings in its wake, investments in building materials, household gadgets and equipment (stoves, fridge, utensils, etc). Housing is a big job creator.

Better planning institutions
If we want to create an economic stimulus in Ghana, we must look at housing. The demand is there as Ghana needs 3.6 million houses in 16 years, an average of 225,000 per year. The good news is that we can do it if we adopt a cohesive and comprehensive approach, some of which are highlighted below.

The acute housing problem in Ghana is as a result of failed policies, rapid urbanisation and population growth, economic growth and a function of all these factors. This is worsened by poor and conflicting planning laws among the existing legislation instruments in the country, the Town Planning Ordinance CAP 84 of 1951, the Local Government law Act 462, and the National Development Planning Act, Act 480.

Poor planning is one of the reasons why we have major challenges in our land tenure system, and also why in 15 years, between the period 1985 and 2000, the built-up area of Accra expanded by 300 per cent while its population increased by 66 per cent. The planning laws are conflicting each other and we need to harmonise them to improve land delivery.

High demands in materials
The provision of 3.5 million housing units by 2025 requires substantial amount of land and material resources. Demand for building materials like timber, sand and chippings, cement, PVC, tiles, glass, etc. will be overwhelming. Ghana has less than one million hectares of forest left and at the current degradation rate of 65,000 hectares per annum, we do not have timber to meet current demands, let alone accelerated housing delivery.

If we build as we are doing now, we would need more land, equivalent to 600,000 hectares or twenty times the land area of Accra to deliver our housing demands by 2025.

New vision and strategy needed
So how do we do it? The problem cannot be solved by one government. To address the housing deficit, we need a vision for the country that should run for a minimum 20 years, eg. Vision 2030 or 2040. When we plan over a longer term, we take population growth, demography and other social factors into consideration.

Under the vision, we need to adopt a better identification system for Ghanaians. We must know ourselves, who we are and what we do, and adopt a comprehensive database system for ourselves. We must improve trust among ourselves and people must be what they say they are.

This is the basis of a viable credit system. Without an efficient credit system, we cannot meet our development needs. The M&E specialists normally say what we do not know we cannot measure, and what we cannot measure we cannot fix. If we do not know ourselves, we cannot solve our problems.

Then we adopt an industrialisation strategy. Industrialisation is inextricably linked to development. Tackling industrialisation will ensure the availability of cheap construction materials needed to build infrastructure and housing sectors.

Indeed there is almost no country that has addressed its housing demands that has not gone through an industrial transformation. Industrialisation can push our limits in infrastructure development, agriculture and manufacturing.

Industrialisation will produce the cement, clay, steel, glass, aluminium, granite, tiles, etc. needed to meet the demands of the housing industry. Fortunately, Ghana has large deposits of these materials in raw form. We need to start a programme to develop our steel, aluminium, glass, cement, clay and tile industries.

In the mining areas, a lot of mining tailings from mining processes which should have been diverted to the housing sector have been spread over arable land, in what is term land reclamation. In this case, the country is not only denied good materials for the manufacture of bricks and sandcrete blocks, but these materials are also used to cover our arable and fertile soils – thus discontinuing farming activities in the mining areas.

Under the foregoing programme, all mining tailings should be excavated and the material used as aggregates, base or sub-base material in the construction of houses and roads in every part of the country. These materials could constitute savings of about 10 to 20 per cent in the construction boom that the state shall credit to building and road contractors, as well as real estate developers. This will reduce the pressure of sand-winning at Amasaman and along our beaches.

With the discovery of oil and gas, we can use our gas to fire our high quality clay that is needed in the housing sector. We can also manufacture several materials needed in the building industry, for example, PVC, which is manufactured from salt and ethylene gas is used extensively in the housing and real estate industries. Then we get bitumen to tar our roads.

As a nation, we have everything we need to develop, more than 99 per cent of what we need. If we get together to identify the linkages, we then establish a credit system, where people and companies may be credited with materials to enable them to produce the needed products. The Credit system shall be backed by National Credit Act.

The land question can also be solved in a similar manner. A Lands and Equity Act should be passed by Parliament where land owners would credit the state with lands for the delivery of infrastructure. In turn, the owners, mostly traditional authorities, on behalf of the people, obtain equity in the facility that will be developed.

Land is never sold. Why should a chief sell a piece of land with no basic amenities for $2000 when that same piece of land can be improved with all the social amenities, well laid-out plans, water, telephone, central sewerage system, good roads, underground drains, wireless broadband, etc. and have a value of $50,000. Everyone then benefits, jobs are created, and we would be able to collect property rates to maintain the facilities.

This is where land financing comes in. Ghana must use advantages of land financing as part of the funding mix for the development of the housing sector.

With land financing, there is upfront generation of funds which reduces the burden of borrowing. Land developments should be priced to reflect costs of accommodating growth as contained in a World Bank publication by George E. Peterson – Unlocking land values to finance urban infrastructure.

The publication shows how Cairo raised $3.12 billion from the sale of 2100 hectares of desert land, and another $1.45 billion from 3,300 hectares all without financial cost to Government. In Mumbai, $1.2 billion was obtained from only 13 hectares. Currently, several billion dollars are being raised in Cape Town, Bangalore, Khartoum, Luanda, Bogota, Istanbul, etc, to finance infrastructure.

Developing the construction sector and skilled manpower
Ghana must build its skill manpower to accommodate demands from the infrastructure and housing sectors. Work is the only way out of poverty and increased access to work through skills training is essential for improving the construction and productive capacity of the country.

Ghana needs to train a large number of middle level personal and skilled manpower to the economy, skilled personal in construction-related occupations, such as electricians, carpenters, construction managers, bricklayers, plumbers, masons, tilers, etc. The Government should come up with a programme to assure Ghanaians of the importance of the skill trades in the economic development of the country and send the message that careers in the skilled trades will be plentiful, lucrative, and fulfilling.

The building and construction sectors should not be left out in the transformation process. Ghana should create a competitive construction industry that delivers quality infrastructure, and promote economic growth and ensure sustainable development.

The construction industry is bedeviled with multiple problems that hinder the prosperity of contractors and the nation as a whole. To effectively mobilise the industry to contribute its quota to the development of the country, the industry must be overhauled. This can be done by:
(i)improving the classification system of contractors.
(ii) putting in place effective monitoring and evaluation mechanisms to measure the performance of contractors and real estate developers.
(iii) establishing a body, a regulator, by an act of parliament to classify contractors in Civil Engineering, Building and Road Works.
Institutions, regulations and research and technology.

As indicated above, Ghana must harmonise its conflicting planning laws and strengthen the Town and Country Planning Department to come up with better and efficient planning system.

The country must put in place a regulatory and research institution, National Housing Authority to advocate and provide knowledge and leadership in the housing sector.

We need to use modern computer technology to design the space and model the skyline infrastructure, to meet modern trends and preserve land. Current horizontal housing development must give way to vertical development.
For the particular case of the mining areas, the Government should set housing standards required for mining communities, and every mining town should be planned and modelled into a community or township comparable to those in developed countries.

This whole arrangement can be put into what I termed a Grand Deal, an agreement between the state, Corporate Ghana and the people. Most of the issues raised above are elaborated further elsewhere. They have worked elsewhere, and they should work in Ghana.

Ghana can build three million houses in 16 years. A lot depends on the role of leadership and the support of the government to make this a reality, and our organisation is ready to support the government step by step and brick by brick to achieve this aim.

Credit : Charles Kwame Boakye
Institute for Infrastructure Development, Accra