SEC engages housing developers over amendment

The Securities and Exchange Commission (SEC) is in discussions with the Ghana Real Estate Developers Association (GREDA) over amendments to the Securities Law that will allow Fund Managers invest more than 10 percent of their funds in housing.

Samuel Amegayibor, Secretary to the Executive Council-GREDA, told the B&FT that GREDA is in discussions with SEC over amendment of the law. “The SEC has gone far in amending the law to allow for Fund Managers to invest more in the real estate sector.”

Currently, fund managers can invest only up to 10 percent of their money in the real-estate sector -- an area that has become lucrative with the growing population and urbanisation.

When amended, the law is expected to further remove restrictions on funds’ investments in the real-estate sector, as it has become necessary to allow capital-market investors to benefit more from investing in the real-estate and construction sectors. It is also expected to help address the housing deficit in the country.

In Ghana, about 1.7million housing units are needed to bridge the current deficit. Efforts by central government to address this have met little success. “Instead of a scheme to address the housing challenges in the country, what we have had are projects,” Mr. Amegayibor said.

Growth in construction to the GDP has averaged 17 percent per annum since the country’s discovery of oil in 2007. The share of construction, including real-estate, in GDP has also risen from 7.2 percent in 2007 to 10.5 percent in 2012. The sector contributed 11.8 percent to Ghana’s overall GDP in 2013.

Director-General of the SEC, Dr. Adu Anane Antwi, noted that the bill is still in the system. “It’s being worked on. It first went to cabinet, and was then referred to the Attorney-General’s department. It has been worked on and is on its way to Cabinet again. When it is finally approved, it will come to Parliament.

“When passed, it will bring many of the operators under regulation. We are also bringing many other products into the market. Commodities and Exchange is coming on-board. You need laws to ensure that this is done,” he said.

The Ghana Real Estate Developers Association (GREDA) estimates that about half of the Ghanaian population are said to live in sub-standard housing and various unsuitable structures.

Various sources estimate that Ghana’s population could reach 32.2 million people by 2020, with about 57 percent living in urban communities.

Many hard-working citizens who don’t own a house or are unable to afford decent accommodation have been let down by two main antagonists: the prevailing economic conditions and inimical housing polices.