As the issue of rent in urban centers of the country gets exorbitant, new figures indicate that 35 percent of Ghana’s populations representing (10,150,000) people live in rented structures that cost below GHȻ10 a month.
Out of this figure, a half, representing five million seventy-five thousand (5,075,000) are said to earn a monthly income below GH Ȼ 50 per month.
This new study, conducted by the Ministry of Local Government with support from the World Bank revealed that the income bracket of these Ghanaians ranges from GH Ȼ 100 to GH Ȼ 50.
The research, dubbed “Rising through Cities in Ghana” is intended to study urbanization in the country to design the right policies in order to maximize its benefits.
Interestingly, the report pointed out that, with a perfect system of housing policy, low income earners between GH Ȼ 500 and GH Ȼ 100 can afford to build a house that costs GH Ȼ 120,000.
Speaking in an interview with Business Day, a Senior Director with the World Bank in Charge of Social, urban, Rural and Resilience; Ede Ijjasz-Vasquez explained that only the top 20 to 25 percent of urban households can afford a fairly good housing with one-third to their income.
This group of income earners must earn at least GH Ȼ 3,000 to afford a house that cost GH Ȼ 108,000.
Mr. Ijjasz-Vasquez revealed that rental levels at the current rent-to-household income ratio shows that only 15 percent of Ghanaians can rent a decent accommodation that costs GH400.
These are people who can afford to build good houses costing GH Ȼ 144,000 and above.
This means that, 85 percent of households are unable to access housing that costs GH Ȼ 72,000, which he explains represents the middle-income earners.
Currently, rapid urbanization and urban growth has triggered a situation whereby the supply of housing lags behind effective demand, especially, in large metropolitan area.
Estimates indicate that Ghana’s housing gap is around 70,000 to 120,000 units per year. By 2020, Ghana may require a total of two million new dwellings, which is about 5.7 million rooms.
According to a UN-Habitat report, the cheapest newly built house from a formal developer in Ghana cost US$25,000.
This, Mr. Ijjasz-Vasquez contends, will be practically impossible to solve the country’s housing deficit since majority of Ghanaians who move to the urban centers cannot afford it.
He stated that the housing deficits for Accra and Kumasi are 72 percent of the total deficits for both regions respectively.
He was of the opinion that the inability of the housing delivery system to effectively meet the demand, results in a situation where many urbanite Ghanaians are forced to live in slums. He counseled that the country must re-visit its rent laws and housing policies to make them effective and potent.
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