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21May’25
GIUDE TO REAL ESTATE INVESTING IN GHANA: EXPLORING ALTERNATIVE ENTRY POINTS FOR BIGINNERS
GIUDE TO REAL ESTATE INVESTING IN GHANA: EXPLORING ALTERNATIVE ENTRY POINTS FOR BIGINNERS A few weeks ago I spoke on a real estate panel at Labadi Beach Hotel on the topic “Unpacking Thriving and New Markets and Strategies to Invest in the Real Estate Sector in Ghana”. Immediately we ended the session, close to half the participants surrounded me to seek more insight into how they can invest in the real estate sector in Ghana. To many, it was a dream to pursue someday when they gather enough funds. Little did they know that, that dream can be materialized even now using the little or no resources they have. But among the masses that came to me was a young University of Ghana student. She was so passionate about real estate investing but lamented a poor financial background that makes her see this dream coming to pass in a far distant future if it comes at all. But while she was still counting her problems and reasons why her dream and passion may be a mirage, I looked at her closely and noticed that she was using an iPhone 16 ProMax. Wow, I exclaimed in my thoughts. So after pouring all her frustrations, I told her she has more than what it takes to start her real estate business today even while a student. She was like what!. What do you mean sir!, she asked in surprise, and I asked her as whether the iphone (iphone 16 Promax 1TB) was for her and she said yes. Then I told her again if she is aware the price of her phone can buy a plot of land or even two (2) or be given in exchange for a land in areas such as Tsopoli and some other parts of Accra? and she said no. The rest is history, the point here is, there are many people out there with the mindset that one needs to have huge capital to be able to venture into real estate investing. In fact, it is good when one has huge funds to start with, but whatever the case may be, one can still start with the little he has or even start with nothing at all. This is not motivational speaking. We have been there before, it is sound industry information you need. Having had this experience with many people over the years as an industry thought leader speaking on real estate programs, I decided to publish this article to help persons nurturing ambitions to invest in the real estate sector, are well informed enough to take the swing. Therefore, the purpose of today’s article is to present a formidable guide to real estate investing in Ghana, exploring alternative entry points for beginners. Now, without wasting time, we shall be taking you through six (6) entry points beginners can use as gateway into real estate investing irrespective of how small their initial capital may be. We shall be looking at; the Land Sale Agency Entry Point, Housing Sale Agency Entry Point, Building Material Supplier Entry Point, Joint Venture Entry Point, Property Rental Entry Point and last but not least, the Barter Trade Entry Point. Land Sale Agency Entry Point One can start his or her real estate business without cash; this sounds weird but it is possible. The Land Sale Agency Entry Point is a real estate investor beginner entry point where the individual subscribes to a trusted real estate company and sell their lands on commission basis. Subsequently, an agreement could then be reached between the agent in question and the real estate company to covert commissions into lands for the agent. A dual arrangement could even be made allowing the agent to receive commission at a certain percentage and the rest converted into lands. The beginner who can do this consistently for two (2) consecutive years or more will have enough parcels of land to start his or her own real estate land banking investment. In some cases particularly with lands owned by chiefs, when an agent brokers the purchase of bulk parcels, the chiefs most often give out extra lands to him by way of appreciation even beside what is agreed upon in their written commission contract. Depending on the size of the transaction, the agent can land a parcel as huge as an acre of bonus land or more in addition to his entitled commission. Let me get practical here with an illustration as to how one can employ this concept. There are many bankers and other corporate workers out there who have excess liquidity but lack the information on genuine real estate companies to buy lands from. Drawing a strategy targeting only bankers and working your strategy out within a year can guarantee surprising results. The sale may work magic if one is able to negotiate installment payment plans or a hire purchase plans between these bankers and the real estate companies. This allows many to buy these lands in multiple units over time without putting stress on their budget. In fact, the demand for hire purchase lands has been fantastically high in recent times, the only challenge there the agent will have to surmount is in twofold, one, information asymmetry and two, availability of trusted real estate companies to do business with. What this means is that, anyone who will be able to make this information of available hire purchase lands to the working public and is able to connect this working public to these trusted real estate companies to deal with, is already on his way to a successful real estate investing business. Just a few weeks ago, we facilitated a similar agreement between BuildMasters Ltd and Estate Masters Ltd. It is not a rocket science, you too, can. Housing Sale Agency Entry Point This concept is similar to the Land Sale Agency Entry Point; the mode of operation is however quite different. Unlike the land sale agency concept where commissions can easily be converted
12May’25
10 COMPELLING REASONS WHY LAND BANKING IS THE MOST PROMISING REAL ESTATE INVESTMENT: EXPLORING OPPORTUNITIES IN GHANA’S EMERGING LAND BANKING SECTOR
Ghana’s real estate sector has consistently been a critical pillar of the national economy underpinned by rapid urbanization, population growth, infrastructure expansion and a growing middle class. Yet one area that remains relatively underexplored but holds immense promise is private land banking. Private land banking is the strategic acquisition and holding of land for future sale or development. It is a concept well-established globally but still maturing within Ghana’s real estate investment landscape. As traditional forms of real estate like commercial and residential developments saturate, savvy investors are increasingly recognizing the value of land banking as a low-maintenance and high-upside investment vehicle. This article examines the prospects, challenges, strategies and recommendations for a successful private land banking investment. As mentioned earlier, private land banking involves purchasing land and holding it with the expectation that its value will appreciate over time. The value appreciation could either be driven by government’s infrastructure expansion, urbanization, rapid population growth, industrialization or even by speculation, particularly in our part of the world. Key factors that determine land banking decisions are often locations with potential for growth or development. Depending on the area of interest of the investor in question, one can decide to choose industrial land banking, residential land banking or agricultural land banking. For purposes of clarity, private land banking differs from public land banking which is often operated by governments as a speculative land price control mechanism. In private land banking, investors or corporations control the land assets, aiming for significant future returns in the future. The investor may either be a private natural person or an artificial person or both. But to help you appreciate the investment prospects in land banking in Ghana, let me refresh your mind a little about the outcome of a survey we completed last year about speculative land pricing in Ghana which was published a couple of months ago. In a study that spanned from 2020 to 2024 using Tema Community 25 as a case study, we discovered that in 2019, the price of a titled land (70ftx100ft) sold at an average price of Ghs 10,000. Fast forward in 2020, it sold at an average price of Ghs 22,000. In 2021, same piece of land sold at an average price of Ghs 50,000, with 2022 price up to an average of Ghs 110,000 and in 2023 sold at a price of Ghs 230,000 and reaching unprecedented price levels of Ghs 470,000 or more in 2024. Estimating the monetary and percentage change in prices between the year 2019 and 2024, you will realized that the change in price between 2019 and 2020 is Ghs 12,000 representing a 120% increase in price. Then, that between 2021 and 2022 was Ghs 70,000 representing an increase in price of about 140%, whilst 2023 and 2024 recorded a change in price of Ghs 120,000 representing a 105% rise in price. As it is clearly seen in the above analogy, there is a consistent over 100 percentage increase in the year-on-year prices from 2019 to 2024. Putting this aside, we conducted another study recently using East Legon Hills as the case study. The purpose was to expand the scope of the survey to give grounds for generalization of the results, as that which reflects the reality of this trend in the Ghanaian real estate sector. Without significant deviation, we arrived at the same results. We found that, investors who bought plots (70ftx100ft) in 2010 for Ghs 10,000 now sell for over Ghs 1million. Mention is not made about the situation in prime locations such as East Legon, Airport Residential, Roman Ridge, Labone, Cantonment and North Ridge. The above findings indicate the investment prospects in private land banking in Ghana. Just have a think about this, after buying the land and securing it in 2019 and 2010 respectively; investors did virtually nothing about it yet benefited from the location’s organic growth over time. This is the beauty of private land banking investment and one cannot afford to miss this opportunity having laid hands on this information today. But quite paradoxically however, as interesting and promising private land banking investment prospects are, we were surprise to find that, majority of land owners who bought and held lands did not do that as land banking investment but rather with the intention of developing them for personal use in the future. It was only in few instances we came across some individuals who actually have acquired a few parcels as land banking investment. For corporate organizations in land banking business, we found virtually none except the Social Security and National Insurance Trust (SSNIT) and Land Holdings, a subsidiary of the LMI Holdings. Even with many of the real estate developers who were found to have huge parcels of lands, acquired them for immediate resale or development but not for land banking investment purposes. This underscores how underutilized this opportunity has been, hence our motivation to draw the attention of prospective investors both local and across the globe to this golden opportunity. Having said this, get ready as we walk you through the 10 compelling reasons why private land banking is a promising real estate investments option in Ghana. Subsequently, we shall also share a few challenges, risks and recommendations for the benefits of prospective investors nurturing ambitions to enter into this investment niche in the real estate sector. Do not go away, get your reading lens on, grab a glass of juice and follow through as we run you through these captivating and compelling reasons. 10 compelling Reasons Private Land Banking is Lucrative Before we go into the intricacies of the ten (10) reasons, it is important to let you know that the list is not exhaustive, we only limited this to ten (1) for want of space and time. We shall be looking at the growing demand for residential and industrial properties, industrial development, scarcity and irreplaceability, capital appreciation, minimal maintenance and operational cost, flexibility of use, future development possibilities, hedge against inflation, legacy asset
20Apr’25
REAL ESTATE INVESTMENT OPPORTUNITIES IN AFRICA: A SYSTEMATIC DATA-DRIVENANALYSIS OF THE CONTINENT-PART-1
REAL ESTATE INVESTMENT OPPORTUNITIES IN AFRICA: A SYSTEMATIC DATA-DRIVEN ANALYSIS OF THE CONTINENT-PART-1 Published: March 2025 Author: Daniel Kontie Category: Real Estate Real estate investment in Ghana has become an increasingly attractive option for investors looking to diversify their portfolios and tap into the country’s promising real estate industry, the country with a stable political environment, a young and rapidly urbanizing population, and rising incomes, Ghana’s real estate sector presents exciting opportunities in all categories of real estate, the residential, commercial, and industrial properties. This is a series brought to you by the Africa Continental Engineering & Construction Network Ltd, a Pan African built environment firm based in Ghana but with a wide range of projects and network of built environment professionals across the continent. The objective is to provide a systematic exposition on the real estate investment opportunities in Africa. Today’s article is part one (1) and we shall be examining five (5) fundamental factors (indices) that positions Ghana strategically, as the most preferred destination for real estate investment in Africa. The Ghanaian political environment, rate of urbanization, middle class growth, Ghana as the African hub for tertiary education and most importantly, Ghana’s housing deficit. Purpose The purpose is to help potential investors make informed decisions in the event they so wish to venture into the African real estate market, for that matter the Ghanaian market. Now, take a seat, grab a glass of chilled drinks and come along with us as we run you down a data driven analysis on the prospects of real estate investment in Ghana. 1.Ghana’s Political Environment First and foremost is the Ghanaian political eenvironment, since the adoption of the 1992 constitution, Ghana have enjoyed political stability and have become a global center of attraction and a case study for many African nations and beyond. It is therefore not by chance that the Global Peace Index (2022) ranked Ghana as the 2nd most peaceful country in Sub-Saharan Africa among 46 others, top six (6) most peaceful countries in Africa and the 40th most peaceful country in the world out of 163. This guarantees security at all levels and gives confidence to the investor community that every dollar worth of investment within the shores of Ghana is secured regardless of which political party is in government. The supremacy of the constitution and the rule of law ensured the checks and balances among the arms of government. The Police Service, the Army, the National Security and all other state institutions mandated to keep democratic balance and political stability have always worked in synchrony, thereby placing Ghana ahead of its peers in Africa to emerge as the most preferred African state for both local and foreign direct investment, of which real estate investment is not an exception. Ghana’s Housing Deficit In addition to the stable political environment, the Ghana Housing Deficit presents a profound real estate investment opportunity. According to the Ghana Statistical Service (2022), Ghana’s housing deficit stood at a staggering rate of 1.8 million. This has made the provision of more affordable housing options for urban dwellers a big challenge for the Ghanaian government. State Intervention The state has over the years undertaken a few housing projects and policy interventions in attempt to bridge the gap, however, this was quite unsuccessful as the deficit continue to grow with time. Efforts have been made by private individuals which contributes but little to closing the gap, leaving the few private institutional developers a huge housing supply gap to meet. Private Developer’s Input GREDA (Ghana Real Estate Developers Association) appears to be the only beacon of hope if the housing supply will ever meet the demand. But for potential investors to appreciate where the investment jackpot lies within the property supply landscape in Ghana, we would like to run you through a brief but empirical analysis. Property Development Mix There are currently about one hundred and forty (140) private real estate developers in good standing in Ghana according to GREDA real estate journal (2023). The 140 have various specialties within the sector, that is to say it is not all of them that are into residential property development. Analysis However, for the purpose of this analysis, we shall assume that all of them develop residential properties. What this implies essentially is that, each developer will have to develop approximately thirteen thousand (13,000) housing units, though not feasible, within the year to be able to bridge the 1.8million gap. This shows how huge the real estate investment opportunity is, in Ghana that cannot be compared to any other destination in Africa. Increasing Urbanization Rate Moreover, another index worth mentioning is Ghana’s increasing rate of urbanization, according to Urban Land Institute, London (2018), urbanization leads to high demand for housing in urban centers thereby putting pressure on residential properties and consequentially leading to high rates of rent in the urban centers across the world. It was against this backdrop that we decided to explore the rate of urbanization in Ghana and its impact on real estate investment opportunities. Ghana’s increasing rate of urbanization is another index that gives prospects to real estate investment particularly in Ghana’s urban centers across the country. A recent observation made by our outfit, the Africa Continental Engineering & Construction Network (ACECN) on some selected African countries points to the fact that Ghana has the highest rate of urbanization, (ACECN, 2024). This again positions Ghana as the most preferred destination for real estate investment in Africa. The figure below is the graphical representation of the rates of urbanization with Ghana topping the list with 58.62% in 2022. Growing Middle Class Also, the ever-growing middle class is another crucial index worth considering, Africa is developing faster than it was in the 20th century, it is therefore not a surprise to see many economic indicators assuming positive resilience across the African continent. Figure 1. ACECN (2024), Data Source (Statista 2022) Ghana have had its share of this rapid development over the years. In 2013, the African Development
20Apr’25
REAL ESTATE INVESTMENT OPPORTUNITIES IN AFRICA: A SYSTEMATIC DATA-DRIVEN OF THE CONTINENT-PART-2
REAL ESTATE INVESTMENT OPPORTUNITIES IN AFRICA: A SYSTEMATIC DATA-DRIVEN OF THE CONTINENT-PART-2 Published: March 2025 Author: Daniel Kontie Category: Real Estate Last week we published part one (1) of this series and we are indeed thrilled with the positive feedback that came from our readers across the globe. It will interest you to know that over one hundred (100) people read the article within the first week of its publication according to our reading tracker. This is good news and an encouragement for us to work harder in disseminating the information on the prospects of real estate investment in Africa to all prospective investors across the world. This article is the professional work and intellectual property of the Africa Continental Engineering & Construction Network Ltd, a Pan African Built Environment Firm based in Ghana but with a wide range of projects and network of Built Environment Professionals across Africa. In this second edition, we shall be examining the last three (3) indices which again like the first edition is, a comparative data-driven analysis that points to the fact that Ghana remains the most lucrative real estate investment destination in Africa. But before we go into the intricacies of the data, we would like to have a recap of the first edition for the benefit of readers who may not have the opportunity to read the first edition. In the previous edition, we examined five (5) fundamental indices, and the data available for all five points to the fact that Ghana stood tall among its peers as the most lucrative real estate investment destination in Africa. We looked at the current housing deficit which stood at 1.8 million and is projected to hit 4.2 million by 2030 if there are no conscious actions to bridge the gap as against the projected population growth of 39 million by same year, that is one side, and the other is the low supply side where it was observed that, the combined effect of the works of the state, individuals as well as the private institutional developers, was not significant enough to still bridge the gap. We also examined the Ghanaian political environment, known to be one of the most democratic and peaceful across the globe with the Global Peace Index (2022) ranking as the 2nd most peaceful country in sub-Saharan Africa among 46 countries, top six (6) most peaceful countries in Africa and 40th most peaceful country in the world. This presents a positive signal while guaranteeing the security of investments at all levels in Ghana including real estate. Urbanization was another index we examined, and it was found that among the thirty-three (33) African states purposively selected for our analysis, Ghana tops the urbanization rate with a staggering rate of 58.62%. This we presume could be a significant contributory factor to the persistently high demand for housing and general infrastructure around the urban centers across the country thereby, increasing the real estate investment prospects. The growing middle class which was found to be rising speedily hitting a height of about 46% as was reported by the African Development Bank in 2013, has also impacted the real estate investment prospects of Ghana significantly, despite the gains that have been eroded by the Covid-19 pandemic in recent past and finally, we also examined the rapid population growth which is said to have stood at 35 million currently and is projected to reach 39 million by 2030. In a nutshell, all the aforementioned indices explored are real estate demand-driven factors, and interestingly, all point to the fact that Ghana remains the most preferred destination for real estate investment in Africa. Today, we shall be looking at the last three (3) indices and this will draw the curtains on the subject under discussion. Now, stay tuned, get a glass of fruit juice, and grab your reading lenses as we run you down yet another data-driven analysis of the real estate investment prospects in Africa using the final three (3) indices, crime rate, foreign direct investment and government policy. To begin with, economic theory suggests that, crime rate has an inverse relationship with investment, particularly foreign direct investment, and what this means essentially is that, a higher crime rate threatens both human and property security. This security threat leads to low foreign direct investment, holding other variables constant. On the other hand, low crime rates boost investor confidence, and the higher the level of investment, the bigger the expansionary growth of the economy. The ripple effect most often under such circumstances, is higher demand for housing as it is the case in Ghana currently. During our analysis of global crime ranking, Ghana ranked 84 with a crime index of 43.9 among 146 countries according to Numbeo (2024), and 17 in Africa among 52 states (Africa Organized Crime Index, 2024). The crime index of 43.9 is classified as moderate according to the Numbeo scale of measurement which grades crime levels between 41 to 60 as moderate. This gives confidence to the general investor community that, Ghana is comparatively one of the most conducive destinations to invest, of which real estate investment is not an exception. Also, sight is not lost on the fact that foreign direct investment (FDI) is another driver of investment globally. Just like all other sectors of the economy, foreign direct investment has a direct relationship with demand for real estate. Interestingly, our exploration found that Ghana is among the top ten (10) countries in Africa with high levels of foreign direct investment with a total FDI value of US$1.5 billion according to Business Insider Africa (2023). Below is a diagram that depicts the top ten (10) African countries with the highest foreign direct investment. Naturally, one would have expected that Zambia, Egypt, South Africa etc would have been projected as the most promising real estate investment destinations in this analysis, taking into consideration their volumes of FDI compared to others such as Ghana. However, the broader scope of analysis taking into cognizance the
19Apr’25
REGULATING THE REAL ESTATE AGENCY SECTOR IN GHANA: IMPLICATIONS: IMPLICATIONS FOR AGENTS AND BROKERS
REGULATING THE REAL ESTATE AGENCY SECTOR IN GHANA: IMPLICATIONS: IMPLICATIONS FOR AGENTS AND BROKERS Published: March 2025 Author: Daniel Kontie Category: Real Estate The real estate agency sector in Ghana has long operated in an unregulated and informal environment, leading to issues such as fraud, unprofessional conduct, lack of consumer protection, and market inefficiencies. Over the years, there have been multiple attempts to regulate the industry but the absence of a proper legal framework meant that anyone could act as a real estate agent without professional training, licensing or accountability. The Real Estate Agency Act, 2020 (Act 1047) marked a turning point in Ghana’s real estate agency sector, leading to the establishment of the Real Estate Agency Council (REAC), a state authority mandated to regulate real estate agency practice, ensure professionalism, and protect property buyers and sellers from fraudulent individuals. The purpose of this article is to examine the historical background of an unregulated real estate agency practice in Ghana, the coming into force of the law and the implications of the law on real estate agents and brokers. Characteristics of the Unregulated Real Estate Agency Market Before the passage of the Real Estate Agency Act, 2020 (Act 1047), the real estate agency profession in Ghana was completely unregulated. Unlike other professions such as law, medicine, or engineering, where practitioners must obtain licenses and adhere to industry standards, any individual could act as a real estate agent regardless of qualifications or expertise. This led to high incidence of fraud and scam transactions, lack of consumer protection and dispute resolution mechanisms, market inefficiencies, poor transparency, misrepresentation of property ownership, fake property listings targeted at scamming prospective buyers or tenants, illegal agency fees with no structured commission system etc, with many unsuspecting Ghanaians including those in the diaspora, fell victim to real estate scams, leading to loss of investments and distrust in the system. The Coming into Force of the Real Estate Agency Council (REAC) Recognizing these challenges, the Government of Ghana passed the Real Estate Agency Act, 2020 (Act 1047) to establish the Real Estate Agency Council (REAC), which officially began operations in 2022. The objective was to sanitize the system by weeding out the fraudulent practitioners and the general unprofessional conduct that characterized the real estate agency sector for decades. Object and Function of the Real Estate Agency Council (REAC) Pursuant to section (3) and (4) (a) to (r) of the real estate Agency Act, 2020, (Act 1047), the object and functions of the Council is to facilitate and regulate the real estate agency practice and the provision of real estate agency services”. The performance of these functions includes but not limited to regulating real estate agency practice by setting standards, licensing of agents and brokers, enforcing ethical conduct, protecting consumers from fraudsters, standardizing agency fees and commissions, maintaining a national database of real estate transactions whilst ensuring the sector is not used as conduit for money laundering. Implications of Act 1047 on Real Estate Agents and Brokers The coming into force of the Act, 2020 (Act 1047) puts a huge responsibility on the shoulders of real estate agents and brokers. It is the arrival of a new dawn that makes agents and brokers quite uncomfortable whilst protecting all parties to real estate transactions including all parties alike. By implication, it is therefore mandatory for all persons and institutions practicing real estate agency before the coming into force of Act, 2020 (Act 1047) to quickly formalize their operations to avoid potential damaging legal consequences. The question however is, how many real estate agents and brokers are familiar with the provisions of Act, 1047 relevant to the core business of real estate agency and their legal implications in the event of a breach of any. In the subsequent considerations of this article, we shall be examining some selected provisions of the law and their implications on the operations of real estate agents and brokers for today. We shall visit that of the implications of Act, 1047 on developers, property owners and investors in subsequent articles. Implications of Section 22 of Act 1047 on Real Estate Agents and Brokers Pursuant to section (22) of Act 1047 “a person shall not (a) provide real estate agency services (b) provide services as a real estate broker or real estate agent (c) engage in any business connected with the provision of real estate agency services or (d) engage in a real estate transaction if that person is not a licensed real estate broker or a licensed real estate agent under this Act”. The law mandates that all individuals and companies engaging in real estate agency services to be licensed by the Real Estate Agency Council. What this means is that, all persons and institutions practicing real estate agency whether now or before the coming into force of Act, 1047 or persons and institutions showing interest in real estate agency practice must all be licensed under this Act, failure to do so amounts to an illegality that may subject one to the full rigors of the law. The purpose is to ensure that only qualified professionals operate in the industry, adhere to a code of conduct to protect clients and ensure transaction transparency etc. Implications of Section (30) of Act 1047 on Real Estate Agents and Brokers With reference to section (30) and (31), the law spelt out the conditions under which the agency license of an agent or a broker can be suspended or revoked whilst section (30) (1) mandates that, “the Council may suspend the license of a real estate broker or a real estate agent, where the Council determines that the real estate broker or real estate agent, in the performance of a function authorized by the license (a) fails to use the real estate forms required for the real estate transaction (b) accepts cash in payment for the real estate transaction (c) fails within a reasonable time which shall not exceed one month to payout moneys received, into
17Apr’25
WHAT THE 2025 BUDGET STATEMENT AND ECONOMIC POLICY COULD MEAN TO THE GHANAIAN CONSTRUCTION INDUSTRY: EXPLORING THE THREATS AND OPPORTUNITIES
WHAT THE 2025 BUDGET STATEMENT AND ECONOMIC POLICY COULD MEAN TO THE GHANAIAN CONSTRUCTION INDUSTRY: EXPLORING THE THREATS AND OPPORTUNITIES Published: March 2025 Author: Daniel Kontie Category: Real Estate There is this phenomenon I have studied over the years, the little or no importance stakeholders of the construction industry attach to the budget statement and economic policy of various governments. Unlike the general business community that takes keen interest in budget statements, our construction industry does not. To us, everything is about technical knowledge. We fail to appreciate the fact that it is not just enough to have the technical know-how but one has to be business-minded enough to be able to convert this technical know-how into physical cash. This reminds me of an article I read a couple of days ago where the Chief Executive Officer of the Ghana National Chamber of Commerce and Industry (GNCCI) Mr. Mark Badu-Aboagye is reported on record to have commented on the 2025 Budget Statement and Economic Policy of the government with particular reference on the impact of the current VAT system which in his opinion has negative implications on the smooth operations and profitability of businesses. This he told the Accra Street Journal on March 13, 2025. The question I asked myself after reading the article was, what has been the position of the Ghana Construction Industry on the 2025 Budget Statement and Economy Policy of government until now. But anyway, let me leave this as a rhetorical question, less I incur the displeasure of others even though it is a legitimate question. This has always been the posture of the industry over the years, but the world has revolutionized, it is no longer enough to have a profession but how to convert your professional practice into a brand that can cross national boarders and transcend generations. It is for this reason that I have taken this upon myself to set the pace by this article to digest what the 2025 Budget Statement and Economic Policy could mean to the construction industry in Ghana. It is my prayer that having blazed this trail, the industry will begin to take keen interest in Budget Statements going forward whilst devising plans and strategies in lobbying with various governments before during and after the reading of national budgets. This will make the economic policy makers understand the dynamics of our industry better so that decision making will always align with the fundamentals to serve specific needs of our industry. Our focus will be on the budgetary provisions that relates to the construction industry and their implications on the functioning and operations of the industry. One thing we should bear in mind is that whether we like it or not, every budget has provisions that impact our sector in one way of the other. Therefore, our information about the budget and the subsequent use of what is provided for us is key to the overall success of the sector and by extension, the nation. Stalled Projects First and foremost, according to section (74) (75) and (76) of the 2025 Budget Statement and Economic Policy, there is a staggering number of 55 stalled projects over the past eight (8) years. This has left a whopping sum of about USD$3 billion in undisbursed loans and about US$300 million in outstanding interim payment certificates (IPCs). The statement went further to list a few of these stalled projects among which were the; Effia Nkwanta Regional Hospital, Kejetia Market Phase 2, Bolgatanga-Bawku Pulimakom road project and Tema-Aflao road project etc. Furthermore, section (92) also stated the outstanding cocoa road contracts reaching a tune GH¢21 billion. What does this mean to the construction industry? Should we celebrate because it has been captured in the budget to be taken care of. Many of these contractors have already demobilized from their various sites. A classic example is the reportage that showed a contractor demobilizing from the Takoradi Interchange project in the roundup to the December polls in 2024. We all know that demobilizing is a significant cost, now these contractors are going to remobilize which is another significant cost. This will automatically affect the profit margins of these contractors. Apart from this, the delay in payment to these contractors is a significant loss considering the time value of money even interest may be applied. Besides, the Finance Minister was also very clear in his statement that it will take 12 years from now to complete these projects considering the IMF’s conditionality which imposes an annual disbursement ceiling of USD$250million for official bilateral loans. This has always been the case with the construction industry, the delayed payments to contractors has been the biggest challenge local contractors face with all governments of the day. It is about time we adopt proactive ways of dealing with governments to mitigate these delayed payments that have always rendered the industry seriously incapacitated. Apart from the damage that has been caused already as a result of the stalled projects, it is great news to see government’s commitment to resume these projects. It is going to stimulate industry growth with a trickling down effect on the supply chain. This will stimulate demand for labor, materials, equipment etc. The question is, are sector players really aware of this and taking conscious steps in preparation for this?. Maybe as usual, we wait patiently to be taken by surprise before we begin to complain as it has always been the case with us. This is because there is no sign of enthusiasm whatsoever about the rejuvenation of these projects neither is there any sign of preparation for it either. Road Tolls and Its Impact Section (160) and (161) of the 2025 Budget Statement and Economy Policy stated that “while the annual average collections from road tolls have not been significant compared to its potential, the existing zero-rate policy for road tolls has exacerbated the situation and dimmed any prospects of raising enough revenue from tolls for road construction and maintenance. “Accordingly, government
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