NHF proposes housing levy on building materials to finance affordable housing

The National Homeownership Fund (NHF) has proposed a levy on certain building materials to create a dedicated financing source for affordable housing in Ghana. Prosper Hoetu, the Chief Executive Officer of NHF, presented the proposal at the Fund's Fourth Annual General Meeting in Accra. The levy aims to address issues such as inadequate infrastructure, limited private-sector investment, and restricted access to housing finance.

Countries like Kenya and Morocco have successfully utilized housing development levies to raise funds for housing, with Kenya generating approximately $50 million monthly and Morocco accumulating about $5 million monthly. Ghana could also benefit from a similar mechanism to establish a sustainable financing base for the housing sector.

The levy's proceeds could fund horizontal infrastructure on land banks to support master-planned communities, reducing investment risks and encouraging private developers to build affordable housing. This approach could also facilitate access to low-interest mortgages, Rent-to-Own arrangements, and rental assistance schemes for workers.

NHF aims to collaborate with the Ministry of Finance, the Ministry of Works, Housing and Water Resources, and Shelter Afrique Development Bank to conduct a rapid diagnostic assessment of the housing sector. The assessment's findings are expected to inform a Country Housing and Urban Partnership Strategy, which will be presented at a National Conference on Housing Finance in October.