Rent Killing Ghanaians

Story By Felix Dela Klutse

Accra in particular is in the midst of an accommodation crisis, as house and land prices spiral out of control.

Non-resident Ghanaians and foreigners and even middle class Ghanaians struggle to get their first foot on the property ladder.For a country still aspiring, to reach an average per capita income of $1,000 by 2015, family houses in central Accra are typically going for around 100-times that figure.
Three-bedroom semi-detached houses in some areas in Accra are selling for $50,000, three-bedroom detached houses with garages for $75,000, and four-bedroom semi-detached with garages for $75,000 but even these are mostly going to non-resident Ghanaians.
Whilst several years ago, the average family-size, three-bedroom house in the Spintex Road area was selling for around $50,000 to $60,000, now the price is closer to $100,000. Uncompleted homes go for a fortune, as foreigners price Ghanaians out of the market, and accommodation shortages intensify.
Even modest houses in the Accra area are becoming increasingly unaffordable, on a price-to-income ratio. Since a lot of Ghanaians could not afford to buy houses, the only option for them is to rent which is also very expensive.

The housing crisis is currently threatening not only the sustainability of the projected economic growth but also the capacity of the government to confront challenges firmly.
The slow and agonizing pace of development in the Ghana’s housing sector underscores the vagueness of whatever policy incentive the government may lay claim to.

The private sector carries a fair share of blame for the failures in housing delivery too.
For instance, in spite of the perceived huge real estate boom, being developed around the country, there are still transparent evidence that the country’s housing deficit estimated to be at 500,000 still exist because the private sector has concentrated its attention on the development of very expensive properties.
The shortages in the housing sector in the country have therefore resulted into surging rents that most Ghanaians are experiencing.

According to a BUSINESS GUIDE’s recent rent survey in Accra, non-residential rents in some areas increased by about 150 percent, while that of the residential areas went up by over 180 percent this year.

The non-residential areas surveyed by this paper include Darkuman, Ordorkor, Awoshie and Weija, Latebiokwashie. The residential areas include GICEL Estate, Weija, Mcarthy Hill, Spintex Road, East Legon and Airport residential area.

During our survey, we had also found out that it takes between a month to five months to find an affordable apartment or flat in Accra. Low to middle income earners are mostly affected. These increases have been one of the key factors driving inflation to double digits.

Some of the residents in Accra this paper spoke to were of the view that the only way to get pressure out of the housing market is to get low cost housing developments up and complemented with reforms that will compel private sector interest to build, and increase supply.

“Besides, direct government intervention is also required to ease the pressure on rent,” most of them stated.

“Some may argue that we are in an open market and so rents could go one way under the current demand surge. But it is imperative that a restriction be imposed, enforced and monitored to avoid contravention until the country gets to a point where there is a semblance of balance,” Mustapha Ahmed, a resident of Mcarthy Hill and a staff of Vanguard Assurance has said.

Guy Boni, a teacher at Fadama Cluster of Schools and a resident of Darkuman said: “it is about the best time to take advantage of the favourable foreign investor sentiment towards the country which has been boosted by improved economic conditions.”
Ghana could take advantage of this momentum to drive a new record level of investment this year, particularly into the housing market, he added.

Meanwhile, government last year released 150 acres of land to a United States/Ghanaian partnership firm to construct 2,500 affordable housing units at Kpone, to be sold to civil servants, teachers and nurses on mortgage basis. These flats are of various types with some having one bed-room and others two bed-rooms.

The project, which together with those in Kumasi and Borteman in the Greater Accra Region, is being funded at a total cost of over $300 million, formed part of the drive by the government to reduce the country’s housing deficit, estimated at 500,000.
Government says it is constructing more than 3,000 housing units in various parts of the country to solve the housing problem.

This intervention is expected to help contribute greatly in reducing problem that plagued the housing sector.

E-mail: felixklutse@yahoo.com

Mobile: 0243226596

Accra-Ghana

Curtailing Africa’s Hunger

Story By Felix Dela Klutse

Africa has the singular and tragic distinction of being the only place in the world where overall food security and livelihoods are deteriorating.

According to statistics from Alliance for a Green Revolution in Africa (AGRA), the number of Africans living below the poverty line ($1 per day) has increased by 50 per cent, over the last 15 years.

It is estimated that one-third of the continent’s population suffers from hunger and in the past five years alone, the number of underweight children in Africa has risen by about 12 per cent, AGRA added.

A root cause of this entrenched and deepening poverty is the fact that millions of small-scale farmers, majority of them who are women, cannot grow enough food to sustain their families, their communities, or their countries.

The challenges confronting Africa’s small-scale farmers start in the field and extend across the entire agricultural value chain. Most African farmers can neither access nor afford basic farm inputs.

High quality seeds, organic and mineral fertilisers needed to replenish depleted soils, and simple water management systems that allow farmers to deal with erratic rains are largely beyond their reach.
Furthermore, good roads are scarce, while strong market and finance systems are lacking.

Research from AGRA shows that since the early 1960s, Africa has gone from being a net food exporter to a net importer of food. Per capita food production has declined as the population growth rate of three per cent a year has outstripped the two per cent annual increase in food production.

In most modern economies, no lasting success has been achieved without first building a strong agricultural foundation.

Many global and national leaders have recognized the critical importance of agriculture to Africa’s development.
In his tenure as Secretary-General of the United Nations, Kofi Annan called for a new “uniquely African Green Revolution that will help the continent in its quest for dignity and peace.”

Due to the afore-mentioned challenges, African leaders are calling for a revolution in agriculture that will enable the continent’s small-scale farmers to prosper. It is believed that through dramatic improvements to agriculture, prosperity can replace poverty in Africa.
To break the cycles of hunger and poverty in Africa, AGRA is responding to the cry of African leaders by building African-led partnerships that draw upon the knowledge of Africa’s farmers, apply the lessons of modern agriculture, and work across the agricultural value chain, while rigorously monitoring the impact in terms of equity and environmental sustainability.

Most importantly, AGRA believes strongly that small-scale farmers in Africa needed the support of government policies that promote sustainable and productive African agriculture and that ensure access to markets.

The African Union’s commitment to supporting its farmers by providing them not just with soil nutrients, but also with better transport, credit, seeds, irrigation facilities, extension services, and market information is also expected to boost agricultural production on the continent.

Today, ending the poverty and hunger of hundreds of millions of Africans requires a clear focus on improving the lives of small-scale farmers.

E-mail: felixklutse@yahoo.com
Mobile: 0243226596

Massive Unemployment Hits Ghana

Story By Felix Dela Klutse

Unemployment is one of the serious impediments to social progress in any nation. Apart from being a colossal waste of a country’s manpower resources, it generates welfare loss in terms of lower output thereby leading to lower income and well-being.

Currently, Ghana’s adult unemployment rate stands at about 20 per cent, while the youth unemployment rate, on the other hand is at 17 per cent, a Director of Youth Achievement Ghana who pleaded anonymity told this paper in Accra last Friday.

Last year, the World Factbook has said put the country’s unemployment figure at 20 per cent. The figure, according to Factbook was 11 per cent in 2000.
International Labour Organisation (ILO) defines unemployed as the numbers of the economically active population who are without work but available for and seeking work, including people who have lost their jobs and those who have voluntarily left work.

Ghana is endowed with enormous human and material resources but these resources have not been optimally utilized. Higher educational institutions in the country play crucial roles in generating the human capacities for leadership, management and technical expertise.
Unfortunately, Ghanaian employers normally complain about the quality of recent graduates while the graduates complain of lack of jobs.

These human resources have not been adequately channeled to profitable investments to bring about maximum economic benefits. As a result, Ghana has been bedeviled with unemployment and poverty. Ghana’s economic growth has not always been accompanied by decline in unemployment and poverty as one expected it to be.
It is actually not surprising that there are so many unemployed youths in Ghana though an environment conducive for employment has not been created by the government.

The protracted energy crisis in the country in 2007 has adversely affected the manufacturing sector. Among all the sectors of the economy, it is manufacturing that is the hardest hit. This is because the cost of running electricity generators increases the cost of production thereby making locally manufactured goods uncompetitive relative to imported products.

This has led to many companies closing shop because their products cannot compete with their imported counterparts. The situation has resulted in thousands of Ghanaians being thrown into the labour market.

Since it is not the duty of government to employ every employable individual, it has created an enabling environment for business to thrive. One would expect the private sector to use such an environment to create more jobs.

Besides manufacturing, agriculture is one sector that if properly developed and given the right policy mix, can suck thousands of youths out of unemployment. But instead of emphasis on agriculture, Ghana is importing food especially rice even when the country has the capacity to be a net exporter of food. Many unemployed people are not employable because they don’t have the requisite skills that can attract an employer.

Owing to the falling standard of education in the last few years, a number of companies are unwilling to employ fresh graduates of Ghanaian universities. Those that seek to recruit fresh graduates put in place measures to retrain them and bring them up to standard. Only few organisations can afford this extra cost.
The result is that some Ghanaian firms now advertise job vacancies on the internet for graduates trained in foreign universities to apply.

Government should also look into the quality of jobs provided. A situation where a university graduate is made to drive a tricycle, for instance, in the name of poverty alleviation calls for review. Where government provides jobs, it must be jobs that are sustainable, and not dehumanizing or demeaning.

A nation with majority of its youths unemployed is sitting on a keg of gun powder. Such unemployed people will ultimately become a menace to society as is currently the case.
Ghanaians are waiting for the new government promise of creating more jobs for the youth as stated in its manifesto.

E-mail: felixklutse@yahoo.com

Mobile: 0243226596

Agony Of Ghanaian Livestock Dealers

Story By Felix Dela Klutse

There is no doubt that the livestock market is a major player in boosting agricultural development in Ghana but in recent times, the trade has suffered due to the high cost of transportation and non-patronage.

Animal sellers at the Kaneshie cow market in Accra spoke out after a long season in distress that resulted to a total decline in the sale of their stock, thereby throwing them into abject poverty.

BUSINESS GUIDE gathered that business activities have suffered because of non patronage. The traders are seen sitting idle in anticipation of buyers and even on arrival, the high price tag on the animals scare them away which has been worrisome to their business.

With the vast economic potentials and natural resources that the country is endowed with, animal dealers travel as far as to neighbouring countries like Niger, Chad, among others to buy animals. The dealers seldom buy from within towns because better animal breeds are found in the neighbouring countries.

In Ghana for example, what are obtained are the local breeds which are usually small in nature and of low quality compared to the ones imported.
Poverty, economic hardship coupled with high inflation has discouraged people considerably from patronizing the animal markets hence, the level of patronage is low.

Due to the situation, many dealers have been forced out of business for the fact that they cannot withstand the enormous challenge that has bedevilled livestock trade in the country.

Ibrahim Muntari noted that the business is very vital to the economy but government does not assist them by providing capital and due to the deteriorating state of the animal trade, a person who invests for instance GH¢20,000 may end up losing a high fraction of his capital.

“This is as a result of the huge cost at which we purchase the animals and the high transportation cost we normally battle with,” he stated.

Currently, a cow costs GH¢2,000 and the cost of transporting one cow from the North to Accra has increased from GH¢15 in April to GH¢30, Muntari added.
Muntari explained that the livestock business is a large employer of labour because of the high level of division of labour between various chains, ranging from the dealers to the butchers and finally to the meat sellers.

He said that due to the setback, many people have pulled out and vacated their stalls thereby triggering a pool of unemployed “army” of redundant people, who wait helplessly for God’s intervention.

He explained that lack of assistance from government has done more harm than good to this trade, which is very significant towards sustaining agricultural revolution in Ghana.

He challenged the government to proffer a lasting solution to livestock production so as to boost animal production, pointing that basic assistance in areas such as soft loans and huge investments should be in place to maintain a flourishing market in the country.

Another livestock dealer who gave his name as Saliu noted that the dealers mostly take loans to buy the animals and people seldom buy them with cash but rather collect on credit and it takes about seven to ten days to payback adding that the dealers encounter difficulties in transporting the livestock’s because they usually go to rural and remote communities to convey them.

According to him, the sellers are often exposed to disasters such as accidents, loss of lives and properties due to the dilapidated condition of the road networks in the country.

A cow seller, Mohammed Auwal Idris, lamented the low sales recorded in the market.
He maintained that the rise in food prices has impacted on the feeds of the animals thereby increasing the price of animals.

He explained that the market is not favourable as they are not often patronised due to persistent complains by people of economic hardship and the lack of money at their disposal.

However, Idris noted that the animal market is a seasonal market, because the market booms only during festive seasons leaving them in a difficult situation afterwards.
Another trader, Umar Mohammed, lamented that the sales are not comparable to sales recorded some years back.
“Even on market days, we suffer lack of patronage. Formerly, one can buy a cow on credit and pay the owner back after selling it but now the situation has changed. You got to pay in cash,” he cried.

E-mail:felixklutse@yahoo.com
Mobile: 0243226596

Electricity & Water Bills Up?

Stroy By: Felix Dela Klutse

TWO UTILITY service providers, namely the Electricity Company of Ghana (ECG) and Ghana Water Company Limited are calling for adjustment in their tariffs.

Ing. Gabriel Gbadago, acting Director of Operations of ECG, told Business Guide at a forum organised by Public Utilities Regulatory Commission (PURC) in Accra last week that the adjustment was needed to enable his outfit upgrade and improve the lifespan of distribution facilities.

“We are asking for tariff adjustment at this time because the cost of supply as well as ECG operating expenses has gone up. We also need to expand the distribution facilities to give access to Ghanaians who currently cannot access electricity supply,” Ing. Gbadago explained.

Kweku Botwe, acting Managing Director of Ghana Water Company Limited, on his part, said the adjustment would help his outfit stabilize water delivery in the country.

In spite of the foregoing, Stephen Adu, Executive Secretary of the PURC has said the adjustment would be based on performance.
Mr Adu emphasised: “We demand that standard performance should be met by the utility service providers. Any provider who fails to meet PURC’s target will face penalty.”

He added that one of the penalties for bad service for instance could be slashing down on tariff of a particular utility service provider.

Fredinand Tey, an executive of the Consumers Association of Ghana, in an interview told this paper that he is not in favour of the proposed tariff adjustment.
He stated: “Tariff adjustment should not be an annual ritual. I believe tariff adjustment must lead to improved services but this has not been so over the past.”

The electricity sector has seen phenomenal growth of between eight and 10.4 percent annual increase in demand over the past ten years, but there has not been a corresponding investment in generation, transmission and distribution infrastructure.

The growth in the sector means that ECG would have to double its capacity every 10 years to bring adequate and reliable power supply to its customers. But the reality is that the company has not been able to expand capacity to meet the growing demand. This inability, according to the company, resulted from lack of funds to invest in the expansion of ECG’s infrastructure, tracing it wholly to the inadequacy of the tariff that ECG customers have paid for services rendered.

The existing infrastructure is being stretched to cater for the growing number of customers and this has led to a situation where most of the network is overloaded, thereby resulting in a number of unplanned power outages.
ECG said it needs $991 million over the next five years to effectively improve power supply in the country.

Water supply in Ghana’s cities and regional capitals has been a major problem for years, but has worsened over the past two decades due to poor urban development, population growth and GCWL’s decrepit facilities and unsound management practices.

Attempts to reverse the situation, including a $140 million project to improve the system in 1989, failed to get the taps running. Most homes in the country have water tanks to store water because the taps could only run for a few hours for two or three days a week.

In some parts of Accra, such as Teshie-Nungua, Madina and Adenta, residents pay between GHp50 and GH¢1 per bucket of four gallons from private suppliers.
Recently, the National Coalition against Privatization of Water (NCAP) organized a picket at the entrance of the Aqua Vitens Rand Limited (AVRL) in reaction to the ongoing water shortage in the country.Alhassan Adam, Coordinator of the Southern Sector of NCAP, said though AVRL has been given the mandate to produce and distribute water and also repair and maintain the distribution system, it has not been able to work to expectation.

E-mail: felixklutse@yahoo.com

Mobile: 0243226596