Reducing Taxes On Building Materials Can Reduce Housing Cost In Ghana By 20% – Engr. Viglo

Engr. Amegashie Viglo

Ghana’s real estate industry is expanding, yet affordable housing remains an urgent issue. The Ministry of Gender and Social Protection estimates that approximately 100,000 people in Ghana are homeless at any given time. In Accra, renting a one-bedroom apartment can cost between GH₵ 1,200 and GH₵ 6,500 per month, while in less urbanized areas, rent can be as low as GH₵ 700. Despite promises from the government and private developers to provide affordable housing, many Ghanaians struggle to find suitable and budget-friendly homes.

Engr. Amegashie Viglo, a seasoned real estate and construction professional with expertise in sustainable building practices, highlights a major issue in Ghana’s housing market: affordability is often misrepresented. “Affordable housing is defined differently by different stakeholders. Some focus on the buyer’s income, while others consider the cost of the property itself,” he explains. However, true affordability should ensure that housing prices align with local income levels, allowing people to own homes without financial distress.

The two biggest obstacles to affordable housing in Ghana are high inflation and low-income levels. While the need for affordable housing is undeniable, the gap between production costs and purchasing power continues to widen. “As housing prices rise and incomes remain stagnant, affordability becomes an illusion for the average Ghanaian,” Engr. Viglo emphasizes. Without intervention, this challenge will persist.

Despite efforts by developers and the government, affordable housing projects often remain out of reach for most Ghanaians. The high costs of land, building materials, and infrastructure make it nearly impossible to offer housing at prices that low- and middle-income earners can afford. “Developers are expected to offer lower prices, but when production costs are high, affordability becomes unrealistic,” Engr. Viglo notes. This disconnect makes it difficult for developers to build genuinely affordable housing.

He said he believes the government has a key role in making housing affordable. “If the government waives or reduces taxes on construction materials, housing prices could drop by as much as 20%,” he states. Additionally, offering tax incentives to developers focused on affordable housing could help drive prices down. Beyond taxation, the government must also invest in critical infrastructure—such as water, roads, and electricity—within affordable housing zones. This would lower costs for developers and make housing more accessible.

One of the biggest challenges in Ghana’s housing sector is the high cost of construction. Inflation, coupled with the reliance on imported building materials, has driven prices up. “Since nearly every component used in construction is imported, developers have little control over costs,” Engr. Viglo explains. The solution, he suggests, is increasing the use of local materials which would help stabilize costs and make housing projects more affordable.

Many developers use the term “affordable housing” as a marketing strategy, yet the homes they offer remain expensive for most Ghanaians. “Affordability is subjective and varies based on income levels, but clearer benchmarks are needed to ensure that affordable housing truly benefits the right people,” says Engr. Viglo. Setting guidelines that link affordability to local income brackets would create a more realistic standard.

Despite good intentions, government-led housing projects often fail to meet affordability goals. Political interference, high construction costs, and inefficiencies lead to overpriced units. “The government is not the best entity to handle direct construction. Instead, it should focus on providing land, infrastructure, and incentives to private developers,” Engr. Viglo argues. A facilitative approach would create a more sustainable housing system.

One of the biggest burdens for renters in Ghana is the requirement to pay one to two years’ rent upfront. “If Ghana could shift to a monthly or semi-annual rent payment system, it would allow tenants to manage their finances better and invest in their future,” the engineer suggests. Additionally, supporting middle-income earners would have a trickle-down effect, freeing up housing for lower-income groups. External funding and grants may also be necessary to address the housing needs of the poorest citizens.

Ghana’s housing crisis requires a multi-faceted approach. By reducing taxes on building materials, promoting the use of local resources, and restructuring the rental system, housing can become more affordable. “Government intervention is crucial, but it must be strategic. Waiving taxes and supporting developers with infrastructure would create lasting solutions,” Engr. Viglo concludes. If these measures are implemented, Ghana could take a significant step toward making affordable housing a reality for all.