The National Homeownership Fund (NHF) has proposed the introduction of a levy on selected building materials to create a sustainable financing mechanism for affordable housing development.
Mr Prosper Hoetu, Chief Executive Officer of the NHF, said the proposed housing development levy would provide dedicated funding to support Government’s investment in affordable housing and improve access to housing finance.
He made the proposal at the Fourth Annual General Meeting of the NHF in Accra.
Mr Hoetu said the levy could help address some of the key challenges confronting Ghana’s housing sector, including inadequate infrastructure, limited private-sector investment and restricted access to affordable housing finance.
He cited Kenya and Morocco as examples of countries that had introduced housing development levies and taxes to mobilise resources for housing.
According to him, Kenya reportedly generated about US$50 million monthly into its housing fund, while Morocco mobilised about US$5 million monthly through levies, including those imposed on selected building materials.
He said Ghana could adopt a similar financing model to establish a sustainable funding base for the housing sector.
Mr Hoetu said proceeds from the proposed levy could be used to provide horizontal infrastructure on land banks to facilitate the development of master-planned communities.
He explained that providing serviced land would reduce investment risks for developers and encourage the private sector to invest in affordable housing.
“Through this, government will be solving a combination of challenges in the housing sector,” he said, noting that the approach would address infrastructure gaps while reducing risks associated with private-sector investment.
Mr Hoetu said the mechanism could also support the provision of low-interest mortgages, Rent-to-Own arrangements and rental assistance schemes for workers.
He said reducing Ghana’s housing deficit required innovative financing models and stronger collaboration among the Government, private sector, development partners and communities.
“We are therefore making a passionate appeal to our shareholder, the Ministry of Finance, for more funding to enable the Fund to serve many more Ghanaians,” he said.
Mr Hoetu said the NHF was collaborating with the Ministry of Works, Housing and Water Resources and Shelter Afrique Development Bank to undertake a rapid diagnostic assessment of Ghana’s housing sector.
He said the assessment would inform the development of a Country Housing and Urban Partnership Strategy aimed at attracting greater investment into the sector.
The findings are expected to be presented at a National Conference on Housing Finance scheduled for October.
