Ghana: Gov’t to Support Mortgage Industry with $1bn Bond

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Ghana will channel a 30-year bond worth $1bn into reducing the country’s rising housing deficit, according to the Finance Minister Ken Ofori-Atta.

The 30-year bond, a maiden one to be issued by Ghana, attracted a billion dollars from investors, with the country expected to pay back investors at a rate of 8.62 percent.

“It’s basically an indication of trust that people would want to go that long with your country… usually when you are creating mortgages, you benchmark them against twenty to thirty year paper.  So now we are beginning to get a sense of such type of pricing, as we create instrument to support the mortgage industry,” he said in Accra.

The minister further explained that this will be achieved through the provision of mortgages and the completion of the government’s affordable housing projects.

Ghana’s current housing deficit is estimated at 1.7 million, with the figure expected to reach 2 million by end of 2019, if measures are initiated.

Already the works and housing ministry ditched an earlier plan of establishing a housing bank to meet the mortgage needs of majority of citizens.

But now the government is seeking to do so via already established commercial banks involved in mortgages.

Meanwhile, Mr. Ofori Atta believes investments into other critical sectors, with the bond proceeds, should drive employment creation.

“A couple of the key issues that our government committed to tackle are infrastructure deficit and job creation. The momentum and tempo for rolling out the infrastructure needs and supporting our projects which will create jobs is what we are going to be focusing on, together with the implementing agencies and the other resources that find the resources to back them up,” he added.

 

 

 

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