Bright Adu Larbi, a 38-year-old security guard making 500 Ghanaian cedis (US$45) a month, didn’t need the ongoing economic crisis to feel overwhelmed by the cost of living in Ghana’s capital city, Accra. For Larbi, the financial strain that came with his growing family had already pushed him to the edge.
In 2021, stagnant wages coupled with increased family expenses meant that he could no longer afford the GHS180 (US$16) monthly rent on his small apartment in Adabraka, a suburb of Accra. With work hard to come by in the wake of the Covid-19 pandemic, Larbi also couldn’t afford to move out of Accra and sacrifice his security job within the city.
The only affordable housing available to him and his family of four was a small wooden kiosk, packed into an informal settlement called Ayigbe Town, built around high-tension electricity towers. These kiosks, built specifically as housing, range from about 16 to 20 square feet in size, with at least one window for ventilation. They rely on rudimentary connections for electricity, some of which are illegal, and with limited sanitation facilities, residents use makeshift baths and toilets.
“We didn’t have a choice. We can’t afford to rent,” Larbi tells Equal Times. But for GHS1000 (US$90), he was able to buy a small kiosk to live in.
Speaking to Equal Times while recuperating from appendix surgery, Larbi decries the high cost of living in Accra that has left him living from hand to mouth. Even though his employer pays for the health insurance that covered his surgery, he can’t shake off the fear that he may be laid off as he recovers. “I wouldn’t know what to do with my wife and two kids [if I lost my job]. It would be difficult.”
His priority remains his daughters, aged two and five. They are enrolled in a low-cost crèche costing him GHS 300 (US$24.78) per term so that both he and his wife can work. But there is nothing left at the end of the month. “I cannot buy clothes for myself. I cannot buy shoes…what can I save?” says the security guard. “When money comes at the end of the month, I pay for school fees, and it is done. We go back to square one and start the month again with nothing again.”
Innocent Tsey, a carpenter, was also forced by high rental prices in Accra to move his family into a kiosk about a kilometre away from Larbi’s. He says he lost his previous home, a boy’s quarters (stand-alone accommodation on the grounds of a bigger house, usually for domestic workers) on a residential property within Accra, without any warning. “One day our landlord came and told us that he had sold the place, so we had to move,” recalls Tsey.
The cheap accommodation in the kiosk estate was initially appealing. For someone who could make up to GHS1000 ($90) a month, the GHS600 (US$54) he pays yearly for his kiosk space was bearable. But he soon came to realise that where he currently lives is no place to raise two daughters.
“It is like a jungle. There is no authority here. No security,” says Tsey. “I feel very bad for moving my family over here. If I could leave here today, I would.”
Tsey’s kiosk is situated on land belonging to Ghana’s Rural Housing Department and the annual fee he pays for the land goes to the state. This means that he does not face the threat of having his kiosk demolished by the local government. Larbi’s family, on the other hand, is one of hundreds of low-income households in Ayigbe Town which occupies the land illegally, and he has had his kiosk demolished before.
These demolition exercises are the only time that Larbi feels the presence of the state in his life. He has never benefited from any welfare support despite his poverty. “Nobody is coming around to help anybody here, but every four years, they bring ballot boxes for us to vote,” fumes Larbi.
Searching for sustainable housing reforms
Ghana’s urban population increased from 50 per cent in 2010 to 56 per cent in 2021, with the Greater Accra and Ashanti regions accounting for 47 per cent of the increase. Research has shown that higher rates of rural-to-urban migration – caused by a lack of decent work in rural areas and a push for higher wages – is putting pressure on basic services such as education, health care, transport and housing.
Estimates put Ghana’s housing deficit at about 1.8 million units. This translates to about six million people out of a population of approximately 33 million in need of housing. However, these figures do not account for the quality of available housing. Ghana’s 2022 Voluntary National Review on the UN’s Sustainable Development Goals noted that there were 8.8 million Ghanaians living in slums, as of 2020, an increase from 5.5 million in 2017.
Successive governments have tried to implement affordable housing schemes to counter the country’s decent housing deficit and help relieve the financial constraints faced by home seekers. But the government’s credibility recently took a hit because of the mismanagement of a high-profile affordable housing project in Saglemi, on the outskirts of the Greater Accra Region, which is currently the subject of a corruption trial.
Divine Aggor, the CEO of the Rent Chamber Group, which advocates for innovative housing solutions, wants the government to step away from affordable housing projects because of such mismanagement and concentrate on the “simpler” option of fixing the rental regime, which is contributing to some Ghanaians being priced out of the country’s cities.
In urban Ghana, 46 per cent of households in urban areas occupy rented dwelling units, according to a 2021 Ghana Statistical Service report.
“Developing solutions that are rental-based could immediately wipe out 90 per cent of the challenges we have in this sector,” says Aggor. “[State-led] affordable housing projects are a complete waste of time and resources,” he adds, mainly because the majority of people wouldn’t be able to afford to buy due to high mortgage interest rates and the low numbers of people even eligible for a mortgage.
In January, the government introduced a National Rental Assistance Scheme, under which the state will give out rent loans to eligible Ghanaians to cover rent advances. But this does nothing to tackle the structural issues impacting Accra’s housing market, particularly for low-income workers: a massive shortage in housing supply and low wages that aren’t keeping up with the cost of living.
Aggor says the simplest solution is for the government to enforce existing land and rent laws, which would make it easier for prospective landlords to purchase land without the threat of multiple payments for the same piece of land, or for extortion, the cost of which are passed on to tenants.
But he says there is very little incentive for such moves. “In Ghana, we don’t enforce laws because the people who are supposed to [do this] are complicit in the very activities that the laws seek to regulate,” says Aggor.
Rental interventions are not new in Ghana. Rent controls were implemented in the 1970s through to the early 1980s with a view to making housing affordable. But it had unintended consequences, as it became a disincentive for the private sector to provide rental housing units.
Regulatory failings not helping situation
Currently, the national Rent Control Department – supposed regulators of the rental regime – are hampered by a severe lack of resources when it comes to adequately monitoring Ghana’s rental market. One of the more scrutinised infractions is the law that limits demand for rent advances to six months. However, due to the limited supply of housing, this regulation is openly flaunted and rent advances of two to three years are the norm. Rent and housing committees are also unable to properly assess and value properties to ensure that fair rents are being charged.
“We have our challenges. I must be frank. We have logistical challenges,” the Rent Control Department’s press officer, Emmanuel Kporsu, said during an online forum, revealing that the department’s 58 national offices only have access to four vehicles to carry out assessments and inspections.
Current comprehensive data on rent is hard to come by. The last holistic housing survey in Ghana came after the 2010 census. But 2014 data viewed through the lens of the current economic reality, with over 50 per cent inflation and one of the world’s worst performing currencies in 2022, shows that the cost of housing outpaces household incomes and is contributing to the average Ghanaian being priced out of Accra, as well as other big cities such as Kumasi and Takoradi.
In its 2014 Housing in Ghana report, the Ghanaian Statistical Service noted a ‘dollarisation’ of the middle-class rental space in Accra, partly due to Ghanaians returning from the diaspora. At the time, middle-class professionals could expect to pay between US$80 (GHS880) to US$450 (GHS4,950) a month in rent with tenants sometimes expected to pay advances of up to two years.
A 2019 Ghana Living Standards Survey indicated average annual household earnings in Accra stood at GHS 63,027 ($5,729), with a national average of GHS 33,937 ($3,084).
Increasingly, peri-urban areas have featured significant housing development because of the cost of housing within major cities. According to the African Cities Research consortium, the pattern of urban physical growth reflects the rapid move from coastal cities like Accra, towards the peri-urban areas inland because of cheaper price of land, and thus, rent. In the last decade alone, an estimated 89 per cent of new urban physical development in the Greater Accra Region has occurred outside of the Accra Metropolitan Area.
Dr. Kwabena Nyarko Otoo, chief economist at Ghana’s Trades Union Congress, is one of the many working Ghanaians who spends as much as four hours commuting to and from work every day because they opted for more affordable housing outside the city. He lives on the outskirts of Accra’s sister city, Tema. “It is really expensive to live in the real Tema itself,” he notes to Equal Times.
Ghana’s cost of living struggles have been a cause of concern for the union. Aside from its advocacy, the TUC has also tried to put in place interventions for its members like rental allowances to support struggling members. The union is also working to establish a Labour Bank to cater to union members by offering loans and mortgages.
But Otoo acknowledges that these interventions can only go so far to address a housing problem that “overwhelms everybody”. There are “serious governance challenges” that limit the effectiveness of the state in this regard, he notes. But the state cannot escape the ultimate responsibility of making it easier for all Ghanaians to afford decent homes.
“We will do our part. But what we do might not fully solve the problem,” concedes Otoo. “The housing problem is so big that we need a major government intervention, and we will continue to push for that.”