The Illusion of Affordable Housing in Ghana: A Critical Analysis

Ghana’s affordable housing initiative, launched in 2020, aimed to provide low-cost housing units to citizens. The programme touted houses priced at Gh48,000 (approximately $8,000 USD) as “affordable.” However, a closer examination of the programme reveals significant inconsistencies, rendering the initiative ineffective in addressing the housing needs of ordinary Ghanaians.

1. Income Disparity: The average monthly salary in Ghana is around Gh3,000-Gh4,000 (approximately $500-$667 USD). Considering the price of the “affordable” houses (Gh48,000), it would take an individual around 12-16 years to pay off the house, assuming they allocate their entire monthly salary towards mortgage payments. This is unrealistic, given the need for individuals to cover living expenses, such as food, transportation, and healthcare.

2. Interest Rates and Financing: The interest rates on mortgages in Ghana range from 25% to 35% per annum. This means that the actual cost of the “affordable” house would be significantly higher than the initial price of Gh48,000. For instance, a 10-year mortgage with an interest rate of 25% would result in a total repayment amount of approximately Gh93,000 (almost double the initial price). This further exacerbates the issue of affordability.

3. Location and Accessibility: Many of the affordable housing units are located in remote areas, far from city centers and essential services. This can lead to increased transportation costs, reduced access to employment opportunities, and limited availability of basic amenities, such as healthcare and education.

4. Quality of Construction: There have been reports of substandard construction materials and poor workmanship in some of the affordable housing units. This raises concerns about the durability and safety of the structures, which could lead to additional costs for maintenance and repairs.

5. Target Beneficiaries: The affordable housing initiative seems to cater more to the middle class rather than low-income households. The pricing and financing arrangements make it challenging for the most vulnerable populations, such as informal sector workers, to access these housing units.

In conclusion, the so-called affordable housing initiative in Ghana falls short of addressing the housing needs of ordinary citizens. The inconsistencies in pricing, financing, location, quality of construction, and target beneficiaries render the programme ineffective. To truly provide affordable housing, the government must reconsider the program’s design, taking into account the living standards and income realities of Ghanaians.

By Peter Apisewu