REVIVE MAJOR SECTORS OF THE ECONOMY- participants

Participants at a budget review seminar by the Ghana National Chamber of Commerce and Industry have called on the government to institute measures that will help develop major sectors of the economy.

This, according to them, will help create more job opportunities to absorb the large number of unemployed youth in the country.

Speaking at the seminar, the Head of the Economics Department at the University of Ghana, Legon Dr Fritz Gokel, noted that the country economy, although had recorded a phenomenal growth, it was still faced with a high rate of unemployment.

He said; “Cocoa production which is the driving force in the agricultural sector recorded a provisional outturn of 14.0 per cent in the 2011 budget while the industrial sector was greatly influenced by mining and quarrying which recorded 225.4 per cent as against the projected 218.1 per cent in 2011”.

“Even though the economy is doing well, it is currently facing a large rate of unemployment as most sectors performing creditably well are largely capital intensive with little employment creating avenues”, he said.

He added that the economy over the years had not experienced a consistent growth point as the various sectors kept growing and declining intermittently, thereby posing growth issues for the economy.

In 2007, services sector dominated the economy with 7.69 per cent growth and industry took over in 2008 with 15.07 per cent. In 2009, agriculture boosted and dominated the economy with 7.20 per cent but relinquished its position to the services sector in 2010, recording 9.80 per cent growth rate. The largest contributing sector currently is the industrial sector which experienced 36.20 per cent growth in 2011.

He stressed that emergent growth issues are as a result of lack of consistency in the various growth points across the years. These growth points are largely capital intensive with little employment creating avenues coupled with the lack of effective linkages.

Commenting on the ability of government to undertake all infrastructural projects outlined in the 2012 budget, Mr Gokel said he was convinced it would be done even though issues of a spillover of projects to the next year ws a possibility.

Infrastructural development, according to him, is a laudable initiative as investment in such areas can be expected to yield high returns as it is a crucial source of economic competitiveness for the country.

GREDA HOPEFUL OF SECURING PARTNERSHIP

The Ghana Real Estate Developers Association (GREDA) is hopeful of securing a partnership deal with government for the construction of affordable housing units for Ghanaians.

This was after several discussions with the Ministry of Water Resources, Works and Housing over a proposed alternative bid on how to reduce the country’s housing deficit submitted by the association in September last year.

The country’s housing deficit is currently estimated at 1.8 million and government in its bid to reduce the shortfall has hit a brick wall.

But President of GREDA, Dr Alexander Tweneboa, told the GRAPHIC BUSINESS in an interview that the discussions with the Ministry of Water Resources, Works and Housing centered, among other issues, on funding and procurement plans.

“This new proposal will signify a new partnership between the government and the private sector, which we hope to develop in the coming months”, Dr Tweneboa said.

He said the association, after submitting the proposal to government is still holding talks with them, as well as its members to see how best they can find a lasting solution to the unending housing deficit increase in the country.

Dr Tweneboa added that the association is disappointed that the STX project could not be materialized as that was a laudable initiative which the country was in dire need of.

“We are disappointed it has not been fulfilled although we hoped government would have done its best in its endeavor in releasing such a laudable project which is needed most,” he stressed.

Dr Tweneboa however noted that Ghana’s housing deficit is currently at a social level which could not be solved by only the private sector but requires “a Public Private Partnership to help reduce the constraint on the private sector to help build affordable houses for people.”

He added that the association is also lobbying for government to partner Pan African Organisations so they can assist the private sector with finance to bridge the housing gap facing the country.

“A positive outcome of our lobbying was the announcement of the support given by Shelter Afrique, a Pan African Organisation to develop the real estate sector as well as help build more housing units in the country”, he said.

Dr Tweneboa is however confident that members of the association will build more houses this year as they consider building low income affordable houses to ease the housing deficit in Ghana.

Members are also being encouraged to go into renting especially in the urban areas where lack of affordable homes are prevalent considering the cost of renting coupled with other factors as it hopes to work harder and provide more housing units to Ghanaians.

“Especially in the urban areas, this is becoming a major problem, lack of affordable rental facilities because some houses costs as much as GHC250 a month while tenants are required to pay 2 years advance. That is a huge challenge coupled with lack of accessibility to water and thus looking at it from this angle we are encouraging our members to go into renting.”

He was however quick to add that there has however being projects to develop slum areas in Ghana which has fairly being successful one of which was the “Slum Upgrading Facility project in Ashaiman- an Accra low income housing area which was a joint project undertaken by UN- HABITAT and the Ministry of Water Resources, Works and Housing. Other partners of the project were the Ashaiman Municipal Assembly and People’s dialogue as well as Tema Traditional Council.

Reacting to why members of the association do not offer affordable homes he said it is true prices offered by most real estate developers are a bit out of the range of majority of Ghanaians but the economic facts of life would not allow them to price lower than what will grant them their benefit.

“Our members are business men who borrow from the banks and are expected to repay back with interest between 27 to 32 per cent while there is always constant increase in price of materials and other factors which leave them with no option than to price in a way that will earn them their profit too,” he said.

KRIF INTRODUCES NEW EQUIPMENT

KRIF Ghana Limited, dealer in office and stationery, has launched a set of state-of-the-art office equipment which will enhance efficiency of operations and give customers value for their money.

The equipment, which was launched in partnership with another stationery company, Diplomat of Korea, included a fire resistant safe, finger print and touch screen lock safe, digital printers and an advanced counterfeit note detector.

The lock safe, which has modern digital locks, guarantees customers more security and convenience to ensure that customer valuables are safe and well protected. The multi-functional digital printer prints on different mediums bringing out the inexplicable minute details of any art work.

The company also introduced multifunctional photocopiers with the ability to copy, scan and print to ensure operational efficiency in office operations by networking all computers to a single photocopier, thereby reducing the cost of purchasing printers for every office.

The General Manager of Krif Ghana Limited, Mr Christian Yebuah, observed during the launch in Accra that with the global changing times, the taste of the Ghanaian consumer kept changing to follow suit and “these piece of equipment are virtually what we need in our offices and homes in ensuring utmost convenience, efficiency and safety.”

He noted that the fingerprint lock and the touch screen lock safe highlighted the break-through that the Diplomat of Korea had achieved in the industry “as these pieces of equipment are totally new on the market”.

On how the machines operated, Mr Yebuah said “the fingerprint lock is operated using a finger because it is embedded with an optical sensor and has the potential of accepting one hundred fingerprints. The touch screen lock safe allows the individual to lock and open the safe by just touching the screen and entering his or her code.”

He said Krif Ghana Limited had realised the importance of back-up support to technical ventures and as such the company would continue to improve upon the professional and technical competence of their team of technicians by providing both local and external training exposure.

Krif Ghana Limited, he said, would from January 1, 2012 reward its loyal customers by conferring an award on the loyal customer with the highest purchases for the month.

He also hinted of the company’s resolve to declare 2012 as “The Year of the Krif Customer” for both cooperate and individual loyal customers.

VODAFONE LAUNCHES ANOTHER Wi-Fi ZONE IN ACCRA

Vodafone Ghana has launched the largest Wi-Fi zone at Ghana Hostels at the University of Ghana, Legon campus to enhance internet connectivity.

The Wi-Fi hot spot zone which is capable of accommodating 5,000 users at a time is also to ensure that students have the fastest access to information on any topic through the internet.

Head of Corporate Communications at Vodafone Ghana, Carmen Bruce- Annan explained to the Daily Graphic after the launch that students on campus could now connect and access the fastest internet speed through their laptops, tablets, smart phones and other Wi-Fi enabled devices at any given time.

She said students would be able to activate by buying a voucher at designated shops in and around the hostel.

Ms Bruce- Annan said “making the internet accessible is something we are committed to. It is important that in today’s world, people can use the internet and benefit from having knowledge at their fingertips”.

“Our students are the new generation who will lead the internet revolution if they aren’t already. We value the contribution we can make to ensure that our country continues to produce a technologically proficient generation,” she added.

Ms Bruce- Annan said the Wi-Fi Zone also reaffirms Vodafone’s commitment to enhance the usage of the internet as a relevant tool in the country’s development process.

She said the company was committed to providing the best data experience for its clients while offering customers the opportunity to enjoy the fastest speed when accessing the internet.

The campus WI-FI zone is the second major data initiative undertaken by Vodafone after launching the largest internet café at the Kwame Nkrumah University of Science and Technology.  

HFC AFFORDABLE HOUSING SCHEME MAKES INROADS

Government in its 2007 Budget mandated HFC bank to provide housing units for public sector workers. How has the scheme fared three years down the lane.

HFC Bank in collaboration with some real estate developers has provided 270 two- bedroom housing units for public sector workers under the bank’s Public Sector Home Scheme.

Delivery of the houses, which has the support of the government through the creation of a GHC 12 million market for the houses started in 2008.

The government funding enabled HFC Bank to finance real estate construction firms put up the 270 housing units in record time. The houses were then passed on to qualified public sector workers in 2008 through a mortgage scheme administration by the country’s first mortgage and real estate finance company.

The General Manager in charge of Mortgage and Consumer Loans of HFC Bank, Mr Charles Bonsu, told the GRAPHIC BUSINESS that the scheme performed very well in the initial year when the first 270 set of homes were constructed and were all acquired by public sector workers.

Public sector workers, who mostly do not benefit from mortgage facilities due to inability to meet requirements and high cost of housing units, therefore, relied on this scheme to acquire their houses.

To qualify for this facility, the applicant must be an employee working in the public sector for a minimum of five years, with an income of GHC260 or more while the applicant must also have 20 or more years to work to pay off the loan.

Previously, the bank was gave out GHC 25,000 to each applicant who met their requirement but it had to be reviewed to GHC30, 000 with an interest of a between 11 per cent per annum and a maximum of 15 per cent to be paid back in monthly installment over a period of 20 years. The interest rate is however pegged at 13.34 per cent currently with a possibility of being reviewed soon.

Mr Bonsu was however lost for words why developers in subsequent years showed little or no interest to partner the bank to deliver the houses to the workers.

“The interest from developers has dwindled after the first sets of houses were constructed in 2008. But the bank makes some disbursement once in a while based on the public worker’s own contact with some real estate developers who construct houses worth GHC30,000”, he said.

He however lauded the efforts of some estate development firms who have contributed significantly to the scheme with the construction of two- bedroom housing units for applicants.

He paid glowing tribute to companies such as Darmax Construction Limited, Blue Rose Construction and GHS Housing and a couple of other companies. The projects are mostly found in Kasoa and Kuntunse on the Accra- Nsawam Road.

Projecting into 2012, Mr Bonsu stressed that the bank will continue to improve on the quality of loans, expand the public sector programmes, get more developers on board as well as help qualified persons to acquire housing units.

He also added that the government had promised to increase the facility so that the scheme would be extended to other public sector employees beside the initial pilot group.

 Although this scheme has been successful, it faces several challenges, due to its high demand as well as the supply side, which has been compounded by developers’ unwillingness to participate in the scheme.

The Public Sector Home Scheme disburses funds provided by Government as loan facilities to public sector employees to enable them to own affordable houses. The categories of workers include teachers, health workers, security personnel as well as civil servants at ministries as well as civil servants at ministries, departments and agencies.

The Minister of Finance and Economic Planning, Dr Kwabena  Duffuor, indicated in the 2012 budget that the government would continue to support the Public Servant Housing Loan Scheme to offer loans to 129 civil and public servants in 2012.

According to the budget provision, the funding was geared towards helping public servants to  

either complete their two- bedroom housing units under construction or also support the construction of about 190 new housing units at various stages of completion.

SMEs ADVISED TO SEEK LONG- TERM LOANS

The Chief Operating Officer of Ghana Home Loans Company, Mr Kojo Addo Kufuor, has advised Small and Medium Enterprises (SME) owners to take advantage of the company’s Equity Release Mortgages (ERM) product in their quest to source funds for their new businesses.

The Equity Release Mortgage is a special product that provides long term loans to SMEs which requires raising capital to support their operations.

Mr Addo Kufuor, who gave the advice in an interaction with the GRAPHIC BUSINESS in Accra said funding for SMEs had been a thorny issue as may commercial banks were mostly reluctant to provide such long term funding to SMEs, particularly, start- ups.

"Indeed available data from the Registrar General’s Department indicate that 90 per cent of registered Ghanaian companies are Micro, Small and/or Medium Scale Enterprises,” he said.

However, he regretted that in spite of the fact that the SME sector created a lot of avenues for employment, the sector was not being properly “lubricated”.

Many banks, he said, however could not be blamed for being hesitant to provide funding for new businesses because such businesses had no track record and also, they were usually unable to show sufficient financial statements to support their claims although they might have very bright prospects.

Mr Addo Kufuor said the ERM offered a more suitable alternative to SME owners who lack lack the funding sources and urged them to come on board.

“There is no down payment required for this mortgage and all fees and charges can be added to the loan to make it easier for the borrower to pay back in monthly installments over a period of 20 years”, Mr Kufuor said.

He said,” Conditions required to release an equity mortgage is the ability of an applicant to own a home while maintaining a regular source of income.”

He added that before deploying risk capital into any project or business idea, an entrepreneur would be advised to ensure that he/ she owned a house at a least.

Mr Addo Kufour said people should focus on the future as there was the need to obtain an additional source of income as expenditure kept changing while income received was constant.