Accra, Ghana – Ghana faces a critical housing shortage, needing over 1.8 million units, yet a significant challenge persists: the homes being built are beyond the financial reach of most citizens. This paradox was a central theme at the Africa Real Estate Conference Expo (ARCE) in Accra this week, where developers, policymakers, and investors grappled with making housing commercially viable without excluding the population.

The urgency is underscored by Ghana's urbanization rate, with 56.7 percent of its population living in urban areas. However, a mere 5 percent of Ghanaians can afford housing without state assistance, highlighting a vast gap between housing demand and effective purchasing power. This disparity affects the market reach of both private developers and traditional mortgage lenders.

In response, the Ghanaian government has implemented measures to lower borrowing costs and boost construction. The National Homeownership Fund has reduced mortgage interest rates from 13.5 percent to 8.4 percent. Additionally, a three-billion Ghanaian cedi ($256 million) revolving fund is dedicated to public sector workers, offering repayment periods of 15 to 20 years. Authorities are also working to restart the Saglemi Housing Project, with the first 700 units slated for completion by March 2027, and have announced plans for a 200-acre Green City Project.

President John Dramani Mahama announced a one-billion Ghanaian cedi ($85 million) allocation for the National Housing Fund in the 2027 budget. He also noted the difficulties faced by informal sector workers in obtaining mortgages, even with regular incomes, due to a lack of payslips and formal banking records. "A system that cannot recognise these livelihoods excludes a substantial part of our nation from the opportunity to own a home," Mahama stated, advocating for banks to develop alternative borrower assessment methods.

Housing Minister Ahmed Ibrahim emphasized the need for increased private sector involvement in affordable housing and mortgage finance at ARCE. While these initiatives aim to address key barriers, their ultimate success hinges on ensuring that financing reaches the households most in need and that developers can construct homes at prices within their sustained capacity. The effectiveness of lower interest rates may be limited if they cannot offset the high costs of land, infrastructure, and construction.

Data indicates that approximately 90 percent of housing in Ghana is currently built through personal savings, reflecting the limited accessibility of formal financing mechanisms for a large segment of the population. This reliance on personal savings often leads to incremental building, which can be slow and may not meet the scale of demand.

Experts suggest that addressing the affordability crisis requires a multi-faceted approach. This includes not only financial incentives but also reforms in land administration, streamlining building permit processes, and exploring innovative construction technologies that can reduce per-unit costs. The challenge lies in balancing the profit motives of developers with the fundamental need for secure and affordable housing for all citizens.

The ongoing efforts by the government and the private sector represent steps towards bridging the housing gap. However, the persistent disconnect between investment inflow and widespread affordability suggests that deeper structural issues, including land pricing, regulatory frameworks, and the availability of accessible mortgage products for diverse income levels, need continued attention and innovative solutions.