Comments on Hon. Hawa Koomson's bombshell

I have listened to and read rebutting comments on Hon. Hawa Koomson’s outburst on rent issues in Ghana. I believe she was trying to justify why rent is expensive in Ghana and that it was a worldwide issue that she could not do anything about it. However, she couldn’t put up a convincing argument. It is interesting to note that those who know the truth are also bushing her.

I acknowledge that rent is expensive in Ghana because I also rent in Accra and at Obuasi but the landlords/ landladies are not getting their investment.

Let me be generous and use the simplest calculation.

If you want to build a 3-bedroom house outskirts of Accra or Kumasi (not the prime areas) and you have cash ready, you will not spend anything less than GHC 1,000,000 (US$ 80,0000); Land acquisition, registration, architectural/ Draftsmanship, building materials, labourers, fitting including pilfering (a necessary evil).

After completion and you decide to rent and charge GHC2,000 per month, it will take you 500 months (approximately 42 years) to recoup your capital outlay. That excludes inflation, repairs, maintenance, property rate, and other chieftaincy or local taxes. Many landlords/ landladies may not live to receive the face value of their investment. This is because on average, most Ghanaians can build after 40 years. Looking at life expectancy in Ghana, most landlords/landladies die before their initial capital is recovered.

That GHC2,000 is very expensive for the average Ghanaian because the average income in Ghana is very low. The income is not commensurate with the cost of living in Ghana. Many middle-class workers earn less than GHC10,000 a month (from transportation, feeding, utilities, clothing, children’s welfare and education, healthcare, etc).

Why are the landlords/ landladies not taking rent monthly?:

Again our system is not well synchronized. A person can have a job today, but in about 3 or 6 months, the person is out of the job and it can take him/her a year or more to secure another job. Ghanaians are communal and sympathetic, you cannot sack a tenant of three or six months just because the tenant has defaulted on one month's rent. Your internal battle of guilt will force you to be patient but the reality is that the landlord/landlady is at a loss. So the landlords/ landladies need to secure themselves by taking two or more years in advance so that at least they can use that money to invest in something else.

Another devastating woes of landlords/landladies is that tenants live in their houses and they destroy virtually every fitting and fixture, making maintenance more expensive and time-consuming. The house can be there for several months just for renovation.

These woes are further deepened by tenants leaving unpaid utility bills. Some tenants will consume and accumulate electricity bills, water bills et cetera, and leave.

A way to mitigate that problem is to take some form of security (extra money) aside from the rent so that at the end of the tenant’s occupancy, the landlord/landlady and the tenant will net it based on the kind of damage or bill left. This will also pose a grievous burden on the tenants.