John Kumah, Deputy Minister of Finance The Government has underwritten the mortgage interest rate by 60 percent through the implementation of National Mortgage Scheme (NMS) under the National Homeownership Fund.
The rate, according to Deputy Minister of Finance, John Kumah has been downsized from the 24 percent average market rate to 10 to 12 percent by participating banks such as, "GCB Bank Limited, Stanbic Bank Ghana Limited, and Republic Bank Ghana Limited" to make home ownership affordable to citizens.
The Deputy Finance Minister told the press on Wednesday, (August 11, 2021) in Koforidua, on the opening day of a three-day workshop for stakeholders in the housing and mortgage sector that the initiative is to also improve Ghana’s debt to Gross Domestic Product (GDP) ratio which stood at 0.5 percent to at least 1.4 times the rate to create new jobs as indicated by the World Bank in 2008.
He attributed Ghana’s poor performing mortgage sector to "high and volatile interest rates, short to medium term lending, mortgage credit deficiencies, primary capital markets and other factors".
Fixing the demand-side challenges of homeownership, he said, prompted government to develop the National Homeownership Fund to pilot NMS and the Affordable Housing REIT’s (rent-to-own) scheme. He said government would also review the repayment plans of the mortgaged homes from 20 to 40 years, especially for young graduates who are not yet financially stable.
Partnership
Mr Kumah indicated that the success of the mortgage scheme, with the Deutsche Gesellschaft für International Zusammenarbeit (GIZ) GmbH as a collaborating partner, has seen government commence the development of Tema Community 22 which involves the construction of 204 houses; the purchase of selected Blocks at Tema Community 26, TDC affordable homes and Adom City for the affordable housing REIT’s; over 462 mortgage applications approved for public sector workers and over 1,500 mortgages being processed by participating banks.
He added that government through the newly enacted Public Private Partnership (PPP) Acts by parliament would enter into partnership with private institutions or individuals who can build residential facilities, and mortgage them to make their returns within a reasonable time frame.
The Deputy Minister also stated that the Ministry of Finance (MoF) would make available the needed funds within the confines of the law for the completion of all started affordable homes across the country, to augment the existing ones.
Mr Detlev Jahn, Manager of GIZ Programme for Sustainable Economic Development (PSED, Ghana)
Housing deficit
The Manager of GIZ Programme […]