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Today in History: Fixed-income earners to pay for houses in cedis - John Mahama

Today in History: Fixed-Income Earners to Pay for Houses in Cedis - John Mahama

In a significant pledge aimed at addressing Ghana's chronic housing affordability crisis, former President John Dramani Mahama, the flagbearer of the National Democratic Congress (NDC), announced on August 25, 2020, that under his administration, fixed-income earners would be able to purchase homes using the local currency, the cedi, rather than foreign currencies like the US dollar. This promise was made during a virtual town hall meeting with professionals and fixed-income workers, where Mahama outlined his vision for transforming the housing sector to make it more accessible to ordinary Ghanaians. The announcement came at a time when the country was grappling with a massive housing deficit, estimated by experts to be over two million units, exacerbated by rapid urbanization, population growth, and economic inequalities.

Mahama's proposal was positioned as a direct response to the widespread practice among real estate developers in Ghana of pricing properties in dollars. This dollarization of the housing market has long been a barrier for many Ghanaians, particularly those on fixed salaries such as teachers, nurses, civil servants, and other middle-income professionals. These workers often find themselves priced out of the market due to fluctuating exchange rates, high interest rates on loans, and the overall volatility of the cedi against major currencies. Mahama argued that this system unfairly disadvantages local earners, forcing them to compete with foreign buyers or diaspora Ghanaians who have access to foreign currency. By mandating payments in cedis, he aimed to stabilize costs and shield buyers from currency depreciation risks, thereby democratizing access to decent housing.

Delving deeper into the details of his plan, Mahama proposed the establishment of an affordable housing scheme that would include long-term mortgage options tailored to the financial realities of fixed-income earners. He emphasized that mortgages could extend up to 20 years with interest rates kept at single-digit levels, making monthly repayments manageable. For instance, he illustrated that a three-bedroom house could be acquired with monthly payments as low as GH¢500 to GH¢1,000, depending on the borrower's income bracket. This would be facilitated through partnerships with financial institutions, government subsidies, and incentives for developers to build low-cost units. Mahama drew from his previous experience as president from 2012 to 2017, during which his administration initiated projects like the Affordable Housing Project in Saglemi, which aimed to construct thousands of units but faced challenges including funding delays and allegations of mismanagement under subsequent governments.

The context of this announcement was the run-up to the 2020 general elections in Ghana, where housing emerged as a key campaign issue. Mahama, seeking to reclaim the presidency after his defeat in 2016, used the platform to criticize the ruling New Patriotic Party (NPP) government led by President Nana Akufo-Addo for what he described as neglect of the housing sector. He pointed out that despite promises, the NPP had failed to deliver on large-scale affordable housing initiatives, leaving many Ghanaians in substandard living conditions, including slums and informal settlements in urban areas like Accra, Kumasi, and Tamale. Mahama highlighted statistics from the Ghana Statistical Service, which indicated that over 60% of urban households lived in overcrowded or inadequate housing, contributing to social issues such as health problems and reduced productivity.

Furthermore, Mahama's pledge extended beyond mere affordability to encompass sustainability and inclusivity. He advocated for the integration of green building practices in new housing developments, such as energy-efficient designs and the use of local materials to reduce costs and environmental impact. He also proposed measures to regulate the real estate market, including stricter enforcement against developers who insist on dollar payments, and the creation of a national housing fund to provide seed capital for low-income buyers. This fund would be sourced from a combination of government allocations, private sector contributions, and international partnerships, potentially drawing support from organizations like the World Bank or the African Development Bank, which have previously funded housing projects in Ghana.

The virtual town hall where this announcement was made allowed for interactive engagement, with participants raising concerns about land acquisition, bureaucratic hurdles in obtaining building permits, and the high cost of construction materials. Mahama addressed these by committing to streamline land registration processes through digitalization and to subsidize key inputs like cement and steel for affordable housing projects. He also touched on the gender dimension, noting that women, who often head single-parent households, would be prioritized in the scheme to promote economic empowerment.

This historical moment resonates today as Ghana continues to face housing challenges amid economic pressures, including inflation and post-COVID recovery. Mahama's 2020 promise underscored a broader policy debate on currency sovereignty in key sectors like real estate, education, and healthcare, where dollar pricing has become commonplace. Critics at the time questioned the feasibility of enforcing cedi-only payments, arguing that developers might resist due to fears of currency devaluation, potentially leading to reduced investment in the sector. Supporters, however, saw it as a bold step towards economic nationalism, aligning with Mahama's overall manifesto themes of job creation, infrastructure development, and social justice.

In retrospect, this announcement was part of Mahama's strategy to appeal to the middle class and working professionals, a demographic crucial for electoral success. Although the NDC did not win the 2020 elections, the ideas presented continue to influence discussions on housing policy. For instance, subsequent government initiatives, such as the Agenda 111 hospitals, have drawn parallels in their ambition, though housing remains a sore point. Mahama's vision highlighted the need for innovative financing models, like public-private partnerships, to bridge the housing gap without overburdening the national budget.

Overall, the pledge to allow fixed-income earners to pay for houses in cedis represented a hopeful pivot towards inclusive development in Ghana. It addressed not just the economic barriers but also the social aspirations of a growing population seeking stability and dignity through homeownership. As urban migration intensifies and the youth bulge demands better opportunities, such policies remain relevant, urging future administrations to prioritize affordable housing as a cornerstone of national progress. This event from August 25, 2020, serves as a reminder of the ongoing struggle for equitable access to basic needs in one of Africa's fastest-growing economies. (Word count: 912)

Read the Full Ghanaweb.com Article at:
[ https://www.ghanaweb.com/GhanaHomePage/business/Today-in-History-Fixed-income-earners-to-pay-for-houses-in-cedis-John-Mahama-1995565 ]