Ghana Home Loans deepens footprint in mortgage market

Ghana Home Loans (GHL) has dominated the mortgage market for years after it was established to provide stable funds to estate developers to complete or start their projects.

It is currently the only mortgage finance institution that operates under a Bank of Ghana supervision as a non-bank financial institution tasked to provide mortgages to teh building public. 

Its mission is leveraging people, technology and strong relationship with funding partners and service providers to deliver superior and excellent customer services.

The company has over the years made conscious efforts to bring total housing solutions to prospective homeowners and mortgage finance institutions and experts.

It has been doing that through its ‘Housing Fair’ which is held twice in a year.

The fair often runs for two days and attracts real estate developers, contractors, merchants as well as insurance companies who come to showcase their products on a platform that has gained credibility over the years.

The April fair, which was the first for 2013, had scores of potential home owners thronging the venue to get answers to their questions as well as establishing links for further relations beyond the fair.

Some of the exhibiting companies included Blue Rose Limited, Salem Estates, NTHC, Lakeside Estates, Legonman Multi-Concept Limited, RSS Developers, Cedars, Kimo Homes, GLIICO, Starlife Assurance and Devtraco.

Also, Ghana Home Loans last month announced its intentions to issue mortgage backed securities in other to raise additional capital to sustain as well as expand its operations.

It has been relying on development finance institutions (DFIs) such as Proparco, DEG and International Finance Corporation (IFC) to raise funds for its operations.

However, the Chief Operating Officer (COO) of the company, Mr Kojo Addo-Kuffour, explained that the time had come for it to explore alternative ways of raising funds to support its ever-expanding business.

He mentioned the mortgage-backed securities as one area that could be of help to the company and expressed the commitment that his outfit will work with the relevant institutions such as the Securities and Exchange Commission (SEC), the National Pension and Regulatory Authority (NPRA), pension fund managers, among others to make the initiative a success.

It hosted the country’s first-ever mortgage-backed securities conference in Accra in which experts in the business; financial institutions, legal practitioners, fund managers, officials from the SEC, among others, were in attendance to exchange ideas on how to make it successful.

The SEC, which regulates he securities market, gave the assurance that it will help make teh initiatve a success.

The COO of Ghana Home Loans said after the conference tha the first mortgage-backed security is planned for the first quarter of next year and could be worth US$20 million coupon.

The successful issuance of a mortgage-backed security, as planned by Ghana Home Loans, will be the first of its kind in the country.

The company is wholly owned by the Africa Fund LLC.GB

Profile of real estate agencies

Lots of real estate agencies have entered the Ghanaian market, focusing on different target markets in a bid to bridge the housing gap. Jessica Acheampong looks at a few of such companies

Blue Rose to build 500 affordable housing units

Blue Rose Limited, a real estate developer championing the course of providing affordable housing units is to construct and sell a total of five hundred houses in the next three years.

The company has already constructed about 300 hundred houses in 2012, and is set to continue at this rate for the years to come and thus accomplish its mission of being the leader in the real estate industry in providing quality and affordable housing.

The company which has Mr Eric Ebo Acquah as its Chief Executive Officer believes it is a basic human right for every individual to own their own home and is thus committed to making this a reality.

The Company was incorporated in 1989 as a Sole proprietorship known as Blue Rose Florist with its main line of business as Landscaping and Horticulture and was later re-incorporated to include Blue Rose.

Aside the construction the company does, the horticulture industry lies at the heart of the company and as such have nurtured their passion for plants and gardens, both domestic and commercial for their clients.

The price range for Blue Rose houses are; 2 bedroom Terrace for US$25,000, 2 bedroom  Semi- Detached house for US$35,000, 3 bedroom semi- detached  for US$50,000 and the  three bedroom Detached house for US$65,000. GB

Regimanuel Gray provides quality, reasonable units 

Regimanuel Ltd, a Ghanaian company with substantial interest in the construction, mining and hospitality in Ghana partners with Gray Construction of Houston, Texas, a US firm with similar interests in the United States to bring quality housing units to Ghanaians.

The company was incorporated in 1991 with real estate development as its core business and represents an outstanding example of a successful international joint-venture in Ghana.

Ever since its inception, the company has had an assemblage of dedicated top caliber local and expatriate personnel managing its emergence as the leading private real estate developer in Ghana.

The real estate developer is well-known for its timely construction and delivery of high quality reasonably priced housing units at prime locations which are adequately provided with social amenities and well developed infrastructure.

To date it has more than 2000 houses bearing these hallmarks and has been the recipient of the 1998 Home Finance Company Gold Award for Best Estate Developer, the Ghana Millennium Excellence Award and the 13th International Construction Award of Trade Leaders Club, Paris. It is also a member of Ghana Club 100-a selection of the top 100 Companies in Ghana.

Its projects sites included East Airport, Kwabenya, in Accra, Essipon in Sekondi/Takoradi and Katamanso on the Accra-Dodowa road. GB

Devtraco targets executive community living

Devtraco Limited which has been in existence in Ghana since 1993 has lived up to its billing of providing exclusive community living with its Master- Planned Communities.

The “Devtraco Living” experience is characterised with peace of mind, serenity, utmost security, convenience and healthy living.

Their estates span across prime area of the Greater-Accra Region; including Greda Housing Project at Teshie-Nungua, Dovehill Estates at Spintex Road, Devtraco Villas at Baatsona (Tema Community 18) and currently, Devtraco Courts (City of Hope) at Tema Community 25.

The real estate developer also prides itself as a company that provides a wide range of products and services to its clientele, including real estate developments, building contractors, estate management services, rentals and sale of serviced plots.

Their twenty (20) years of experience in the provision of building and housing needs has helped them understand client needs and aided their quest to provide tailor-made solutions to them.

Currently at 17 per cent per annum and growing, Devtraco properties value appreciation is unrivalled anywhere in the world, making it the ultimate investment choice; and then there’s the rental yield of between 8% and 10% per annum. GB

Lakeside estates eyes young families

Lakeside Estate is a private real estate company specialising in affordable housing for the residential needs of young families and professional individuals.

Its mission is to provide quality but affordable housing units that are environmentally friendly and meet the aspirations of many Ghanaian home dwellers while giving shareholders value.

The company has a vision of becoming one of the best customer focused Real Estate Companies in Ghana that will expand through the building of unique variety of housing units that are environmentally friendly, affordable to many, and conforming to the Ghana Building Code.

Presently Lakeside Estate is developing its Ashale-Botwe North property which was leased from the Nungua Stool.

The company is a member of the Japan Motors Group of Companies and a member of Ghana Real Estate Developers Association (GREDA). GB

Single digit inflation target in limbo

The rate at which the general price level of goods and services change over time, thus inflation inched up for the seventh consecutive time to peg at 11.8 per cent in July 2013.

The rate is per the rebased Consumer Price Index (CPI) which has 2012 as its base index and meant to reflect the actual consumption pattern of individuals.

Inflation slipped from the single digit target by government in January 2013 after it recorded a rate of 10.1 per cent and has increased steadily to its current rate.

Although the combined pressures of the food and non food basket push the rate up often, the trend for July was different as the food component recorded 7.3 per cent same as June 2013.

The non-food component however recorded a rise from 15.1 per cent in June to 15.4 per cent in July 2013.

Governor of the Bank of Ghana, Dr Henry Wampah at the last Monetary Policy Committee (MPC) press briefing explained that inflation could further move up given the upside risk of potential pass-through effects of further petroleum price adjustments, possible adjustment of utility tariffs, and pressures arising from the impending public sector wage settlement.

According to him, these could however be moderated by the tight monetary policy stance, the ongoing fiscal consolidation and favourable seasonal factors arising from the oncoming harvest season.

The Government Statistician, Dr Philomena Nyarko responding to concerns about further increase of the rate could not give a definite stance as according to her, their work relied heavily on available data and not forecast.

But with the oncoming harvest season, the food inflation is likely to fall while other factors could push the non food inflation up, hence making it difficult to determine the outcome of the rate in the months ahead.

She however explained that the rising exchange rate could affect the rate as not all food items are grown locally because others are imported and those one would feel the impact of declining fortunes.

Governor Wampah said the inflation forecast had shifted marginally since the last MPC meeting although the Committee noted that the forecast for end-year inflation is likely to be close to the upper band.

“However, subject to the rate and timing of the adjustment in utility tariffs, the forecast could return to central path by the first quarter of 2014,” he said.

Meanwhile, brisk economic activities in the Western Region as a result of the oil find pushed the regions inflation up to 15.0 per cent, higher than the national rate of 11.8 per cent.

She however added that the fact that the rate is rising does not necessarily mean prices are high in the region but it tells you the consumption pattern of people there as a result of the natural resource finding.

The Ashanti Region followed closely with 14.1 per cent while inflation was lowest in the Upper East Region with 4.6 per cent. GB

July inflation rises to 11.8%

INFLATION for the month of July inched up to 11.8 per cent, from the 11.6 per cent recorded for June 2013, the Ghana Statistical Service (GSS) has announced.

The monthly change rate for July 2013 was 1.3 per cent, compared to 1.5 per cent recorded in June 2013.

Inflation, which is measured by the Consumer Price Index (CPI), measures the change over time in the general price level of goods and services that households acquire for the purpose of consumption.

The Government Statistician, Dr Philomena Nyarko, addressing the media said food inflation recorded a rate of 7.3 per cent, same as June 2013 while the non food basket recorded 15.4 per cent in July 2013 compared to a rate of 15.1 per cent in June 2013.

Although inflation rate for July was expected to dip due to the harvest season, Dr Nyarko explained that the effect of the rising exchange rate helped push the rate higher.

The main drivers of the non food inflation were clothing and footwear (18.1%), Miscellaneous goods and services (17.7%), furnishing, household equipment and routine maintenance (17.0%), and Housing, water, electricity, gas and other utilities recorded inflation of 16.6 per cent whilst the communications sub group had the lowest rate of 1.3 per cent.

At the regional level, the Western Region recorded the highest year-on-year inflation rate of 15.0 per cent, followed by the Ashanti Region with 14.1 per cent. Inflation was lowest in the Upper East Region with 4.6 per cent.

Govt, BoG commits to release stake in ADB

The call for shareholders of the ADB to sell their stake to the public is yielding positive results. Jessica Acheampong reports

The shareholders of the Agricultural Development Bank (ADB); Government of Ghana and Bank of Ghana (BoG) have given their strongest indication yet to let go their stake in the bank.

The move forms part of efforts to recapitalize the bank to enable play its role more effectively as a major financier of agricultural development projects as per the mandate that set it up as well as remain competitive among its peers in the highly competitive banking sector.

Although it is not clear how much each intends to offload, the two shareholders have pledged to offload their stake on the local bourse to allow indigenous Ghanaians to have a stake in the bank.

Hitherto, past governments had attempted to get a strategic partner to take over the bank but for the public uproar against such move which made it impossible.

“I wish to state that government genuinely supports the plan initiated by the outgoing Board of Directors prevail on the shareholders of the bank to offload their shares through share floatation on the Ghana Stock Exchange,” Trade and Industry Minister, Mr Haruna Iddrisu said on the sidelines of the inauguration of a new board for the bank.

According to him, the government committed itself to that bid and would work with the new board through the various steps required to arrive at the objective of raising capital through the GSE.

With regards to the stake held by the BoG in the bank, the minister described the situation as a conflict of interest since the central bank was in the position a regulator and at the same time a player with shares in the bank.

“BoG will be encouraged to divest its shares in ADB since BoG cannot be both a regulator and a player,” he said.

The Governor of the BoG, Dr Henry Wampah has however given positive indications of a possible pull out of ADB in due course.

He explained that currently a committee comprising ADB, BoG and the Ministry of Finance were deliberating on the way forward.

The Governor was however optimistic that in a few weeks something definite would come out of the deliberations and would be more geared towards the bank listing on the GSE.

ADB commenced business with an authorised share capital of GHC3,000 (then ₵30 million) but is now operating with a share capital GH₵75 million made up of 25.0 million shares.

Much of these shares were not issued for cash and, in the current scheme of things ADB will require a much larger capital base to make much more meaningful impact in its operations and be able to compete favourably with its peers in the industry.

ADB’S NEW BOARD

sworn into office has Nana Soglo Allon IV as its chairman with Mr Abdul-Samed Iddrisu, Mr Maurice Tanko Abisa Seidu, Ms Nancy Dakwa Ampofo and Dr Samuel Kofi Dapaah as members.

The rest are Managing Director of the bank, Mr Stephen Kpordzih, Mrs Caroline Otoo and Major (RTD.) Mahama Samuel Tara.

They were sworn in by Mr Iddrisu on behalf of the Minister of Finance, Mr Seth Tekpeh and charged them to provide the needed leadership required to turn around the fortunes of the bank.

BRIEF ON ADB

In 1964, Bank of Ghana set up a Rural Credit Department to prepare the necessary legislation, plans and procedures for the establishment of a specialized bank for the provision and administration of credit and other banking facilities in the agricultural sector.

In 1965, Parliament passed The Agricultural Credit and Co-operative Bank Act, 1965 (Act 286) which incorporated a bank under that name.

In 1967, National Liberation Council Decree (NLCD 182) was passed to change the name of the Bank to Agricultural Development Bank (ADB) and amended certain sections of the original Act to allow ADB to undertake the acceptance of deposits on current and savings accounts and transact banking business normally carried on by commercial banking institutions, including raising loans from foreign sources.

 In 1970, The Agricultural Development Bank Act, 1970 (Act 352) was passed to broaden the Bank’s functions. ADB was granted a full banking license in that year under the Banking Act, 1970 (Act 339).

 In 2004, ADB gained a Universal banking license under Banking Act 2004 (Act 673) which removed restrictions on banking activity.

From its original Head Office on Tunisia Road, ADB moved to the Ring Road Central, then to the Cedi House on Liberia Road in 1993, before finally settling at its current ADB House Head Office premises on Independence Avenue in 2005. GB

BoG stays policy rate at 16%

The Bank of Ghana (BoG) has maintained the policy rate at which it lends to commercial banks at 16 per cent for the third quarter of the year.

This was after it assessed economic activities in the country and policies put in place to prevent prices of goods and services from rising constantly.

The Monetary Policy Committee of the bank, chaired by the Governor, Dr Henry Kofi Wampah, told journalists in Accra today that the bank was satisfied with the policies put in place by the government to check increases in general price levels, hence the decision to maintain the rate at 16 per cent.

Speaking at the 56th Monetary Policy Committee (MPC), Dr Wampah said”the committee also noted measures put in by the government to address the shortfall in revenues and also reduce expenditures.”

The policy rate is the rate at which the BoG does overnight lending to universal banks in the country.

According to Governor Wampah, “exchange rate pressures moderated during the half year relative to the same period last year, largely on account of the various policy measures implemented by the Bank.”

It is expected that the proceeds from the cocoa loan syndication and the Eurobond issue, amounting to a total of almost US$2.0 billion during the second half of the year, would shore up the international reserves and further calm pressures in the foreign exchange markets.

Meanwhile, prospects for growth improved in the second quarter of the year as evidenced in the Bank’s Composite Index of Economic Activity (CIEA), a rebound in consumer confidence and improved credit conditions and in the outlook, the improvement in energy supply and increased oil production are expected to support growth.

Addressing the media, he said although inflation forecast had shifted marginally since the last MPC meeting, the Committee was forecasting that end-year inflation was likely to be close to the upper band.

“However, subject to the rate and timing of the adjustment in utility tariffs, the forecast could return to central path by the first quarter of 2014,” he said.

Due to these economic indicators, he said the committee was of the view that the current monetary policy stance was appropriate and, therefore, decided to maintain the policy rate at 16 per cent.

Agric Ministry yet to receive 2013 budgeted funds

THE Ministry of Food and Agriculture (MoFA) is yet to receive funds budgeted for in the 2013 budget, a deputy Director in charge of Policy, Planning, Monitoring and Evaluations Division of the ministry, Mr Daniel Ohemeng Boateng has revealed.

That, he said was due to  the fact that the Ministry of Finance and Economic Planning approved just 39 per cent of MoFA’s request for GHC 745.83 million to be used to finance its activities in the 2013 financial year.

MoFA, which oversees the country’s agricultural sector, put up a budget of GHC 745.83 million as captured in the 2013 budget.

However, Mr Ohemeng Boateng said MoFEP approved only GHC292.48 million, leaving a funding gap of GHC 452.75 million.

That notwithstanding, he said even the approved funds were yet to be released. “As we speak, operational funds we have received are only for the first quarter while the second quarter funds for 2013 are still awaiting approval from MoFEP.”

He, meanwhile stated that salaries for staff were accordingly received  every month while the district assemblies under the ministry had not received a dime for their operations.

The deputy director could not hide his disappointment about the rate of release of funds to the ministry for its operations at a budget advocacy workshop organised by the Institute of Financial and Economic Journalists (IFEJ) with support from Star Ghana.

Bemoaning the woes of the sector further, he said the ministry still owed suppliers of fertilizers under the fertilizer and seed subsidy programme for last year, something which he said was very embarrassing.

Also, payments to contractors of their irrigation projects were still outstanding for the year 2012, he revealed.

He, however, explained that in spite of the lack of inflow of funds to the ministry, it would still pursue some strategies to ensure that it lived up to its billing of promoting and sustaining agriculture in the country.

Paramount among the strategies is to partner the private sector to develop the agricultural value chains as well as upscale credit support facilities for farmers in the value chain.

The ministry is therefore suggesting that the government set aside a separate fund for its fertiliser and seed subsidy programme to prevent cost in destabilising MoFAs budget as well as stifle funds for normal operations.

A discussant at the forum, Mr Philip Abayori who is the National President of the Farmers and Fishermen award winners called for an advocacy to ensure that authorities realised the need for support for the sector.