Taxing the Roof Before Laying the Foundation

On 22 October 2026, the Minister for Works, Housing and Water Resources, Hon. Ahmed Ibrahim, stood before a cluster of microphones in Accra and offered a rare political confession. He wants a new National Housing Levy. Yet he is hesitating. "Every politician is always afraid," he admitted. "I want to bring a levy for housing, but I’m scared. Ghanaians will revolt."

He should be.
Pointing to Kenya’s mandatory payroll deduction, the Minister wants workers to fund a new National Housing Fund to close Ghana's 1.8 million-unit housing deficit. If Ghanaians revolt, it will not be out of greed. It will be out of memory.

For forty years, the state has dipped into our collective commonwealth to build homes christened "affordable" that no ordinary worker can afford. We have seen SSNIT worker flats priced for the elite. We have watched the 2006 Borteyman and Kpone shells rot in the grass. We have paid for the US$196 million Saglemi mirage, created an under-utilised 2019 National Homeownership Fund, and unveiled Pokuase estates where a studio flat demands US$13,800 and a three-bedroom unit hits US$42,550.

The pattern is unbroken. Whenever the state pools public money without fixing the underlying cost of construction, it fails the poor. Pouring a new payroll tax into a predatory construction market will not house the worker. It will merely subsidise the cartel.

The GH₵79.8 Billion Pension Paradox

Why invent a new housing tax when a massive housing vault already sits unlocked on our statute books?

Eighteen years ago, Parliament passed the National Pensions Act, 2008 (Act 766). Section 103(2) grants every formal worker the legal right to use their mandatory Tier 2 occupational pension to secure a mortgage for a primary home. Section 114(2) goes further. It allows workers to withdraw their voluntary Tier 3 provident funds entirely tax-free to pay down a primary mortgage.

By the close of 2025, private Tier 2 and Tier 3 pension funds held GH₵79.8 billion in Assets Under Management. The law is clear. The vault is full. Yet how many workers have actually walked through that statutory door?

Look at Table 28 of the National Pensions Regulatory Authority’s (NPRA) audited 2023 Annual Report. Out of more than three million active contributors, the regulator approved just 20 applications nationwide for a primary residence mortgage in an entire year. Twenty. Across the republic, formal mortgages represent less than 0.5 per cent of GDP, serving barely 0.8 per cent of households.

Confronted with this failure, bankers and pension trustees trade blame. Bankers complain that Section 103 only gives them a paper lien on a worker’s Tier 2 balance, not cheap cash liquidity. Starved of long-term funds, banks lend short-term deposits at 22 to 28 per cent interest.

Run the arithmetic. Today, a standard 125-square-metre, three-bedroom house in Accra averages GH₵890,000. If a nurse or teacher earning GH₵6,000 a month uses their Tier 2 pension to secure a 100 per cent mortgage at 24 per cent interest, the monthly repayment hits nearly GH₵18,000. The loan requires three times their entire salary. The worker is disqualified at the bank’s front desk.

Meanwhile, pension trustees and Organised Labour—scarred by the 2023 Domestic Debt Exchange haircuts and the 2024 SSNIT hotel controversy—rightly guard Tier 2 and Tier 3 funds against state capture. Trustees insist their fiduciary duty under Act 766 is to beat inflation, not hand worker savings to politicians or subsidise single-digit mortgages when Treasury bills pay double digits.

That excuse rings hollow. Packing over 80 per cent of worker pensions into government paper is what exposed retirees to sovereign haircuts in the first place. Audited 2025 scheme reports now explicitly state their top mandate for 2026: de-risk sovereign concentration and shift into inflation-hedged real assets. And what happens to a worker’s retirement security when they turn 60 without a roof? They burn their entire Tier 2 lump sum paying two-year rent advances to landlords. Channelling a tiny fraction of pension liquidity into a ring-fenced, privately governed mortgage bond does not violate fiduciary duty. It extinguishes the retiree's single largest liability: shelter.

Elevator Prices, Speculative Greed

Even if we fix pension finance tomorrow, cheap credit cannot cure overpriced concrete. Today, building a modest three-bedroom house in Greater Accra costs between GH₵4,200 and GH₵5,500 per square metre before buying a plot of land. Why?

Cement manufacturers and steel importers blame imported clinker, billets, port levies, energy tariffs, and the cedi. Real estate developers under GREDA point out that the state forces them to act as private municipalities. Developers spend up to 25 per cent of their project budgets drilling boreholes at GH₵35,000 apiece, digging septic tanks, grading roads, and buying electricity transformers.

Both excuses contain a kernel of truth. Both conceal a deeper disease: asymmetric, speculative pricing.

In Ghana’s construction market, prices take the elevator up and never take the stairs down. When the cedi slips or freight spikes, importers, hardware cartels, and developers mark up retail prices by 30 per cent overnight. They do not price on production cost plus a fair margin. They price on fear of where the dollar might sit eighteen months later. Yet when inflation drops or the currency stabilises, hardware prices stay frozen at crisis peaks. Just last month, in September 2026, cement manufacturers imposed a uniform GH₵12-per-bag surcharge nationwide, pushing a bag of cement to between GH₵95 and GH₵120. Developers, meanwhile, shamelessly index Ghanaian sand, stone, and mason labour in US dollars.

If imported clinker is the villain, why have manufacturers and the Ministry ignored the Council for Scientific and Industrial Research (CSIR-BRRI)? Their locally produced pozzolana and engineered burnt clay bricks can replace 35 per cent of imported clinker and slash walling costs by a third. Developers claim Ghanaians stigmatise clay bricks as village housing. Nonsense. The wealthiest mansions in Accra flaunt exposed brick and terracotta finishes. Standardise local materials in modern designs, and the stigma dies.

Dismantling the Cotonou Excuse

Look three borders east to the Republic of Benin. At Ouèdo, just outside Cotonou, Benin is building 20,000 social and economic homes. A finished 71.5-square-metre, three-bedroom social villa there costs 22,880,000 FCFA (roughly US$37,500). That is 30 to 40 per cent cheaper than comparable estate units in Ghana. Under Benin’s rent-to-own (location-accession) scheme—opened in October 2026 to both civil servants and private traders—a buyer walks in with zero deposit and pays 97,000 FCFA (US$158, or about GH₵2,500) a month over 25 years to own the home.

Mention Benin in Accra, and officials quickly hide behind the CFA franc. They argue that Benin’s Euro peg delivers low WAEMU inflation and 4.5 per cent interest rates that Ghana cannot match under an IMF programme.

That defence confuses monetary policy with physical engineering. Before a single franc of mortgage interest is calculated, Benin’s physical brick-and-mortar cost is a third cheaper than Ghana’s for three operational reasons.

First, the Beninese state absorbed the surcoût—the infrastructure surcharge. Backed by a 385 billion FCFA infrastructure package, the state laid 4.9 kilometres of paved roads, 16.2 kilometres of storm drains, water mains, and power grids at Ouèdo before pricing the houses, while installing utility ducts for private telecom operators to pull 20.5 kilometres of fibre-optic cable without tearing up asphalt. The buyer pays for the vertical walls; the state pays for the public utilities around them.

Our Finance Ministry will claim Ghana lacks the fiscal space to do the same. Really? Every year, our Ministries of Roads and Highways, Energy, and Works, Housing and Water Resources spend billions retrofitting asphalt, transformers, storm drains, and water pipelines into chaotic, unplanned settlements like Kasoa, Adenta, and Oyibi. Retrofitting after encroachment—paying demolition compensation and weaving around blocked waterways—costs three times as much as servicing bare land upfront. Synchronising 15 per cent of existing capital budgets across the Department of Urban Roads, ECG, the Hydrological Services Department, and Ghana Water Company Limited onto designated housing land banks requires zero new taxes. It requires cabinet discipline.

Second, Benin killed fragmented Ministry tenders. It created SImAU (Société Immobilière et d'Aménagement Urbain), a private-sector-led mixed-economy company co-owned by the state, commercial banks, and insurers. By standardising designs and ordering cement, steel, tiles, and plumbing in bulk across 10,849 units at once, SImAU crushed middleman markups and forced factory-gate discounts.

Third, Benin’s rent-to-own law neutralised foreclosure risk. Legal title stays with SImAU until the final payment clears. Banks do not face five-year court battles when a borrower defaults. A defaulter is simply a tenant whose lease ends.

Fix the Plumbing Before Turning on the Tap

If Hon. Ahmed Ibrahim wants to house Ghanaians without triggering a revolt, he must drop the National Housing Levy and execute four structural reforms.

1. Convert Sections 103 and 114 of Act 766 from Paper Liens into Privately Governed Liquidity Bonds. Establish a SImAU-style Mixed-Economy Special Purpose Vehicle where majority shareholding and board control rest strictly with Corporate Pension Trustees, Organised Labour (TUC and CLOGSAG), commercial banks, and insurers. Keep politicians out of the cockpit. Allow pension funds to subscribe to 20-year, inflation-indexed housing bonds using just 5 per cent of their GH₵79.8 billion asset pool. Channel that GH₵4 billion liquidity directly to partner banks—never to a Ministry—to underwrite single-digit, cedi-denominated rent-to-own mortgages where title remains with the SPV until payoff.

2. Synchronise Roads, Energy, Drainage, and Water CAPEX to Absorb the Surcoût. Mandate the Ministry of Roads and Highways (Department of Urban and Feeder Roads), the Ministry of Energy (ECG and NEDCo grid extension), and the Ministry of Works, Housing and Water Resources (Hydrological Services Department and Ghana Water Company Limited) to coordinate 15 per cent of their existing annual capital budgets to pre-service designated housing land banks with roads, storm drains, water mains, power grids, and "Dig Once" shared utility ducts (enabling private telcos to pull open-access fibre at zero civil cost) before a single block is laid. That public infrastructure forms the state’s minority equity in the SPV, tied to a binding contractual cap that passes the 30 per cent infrastructure saving directly to the homebuyer.

3. Break Material Cartels with Bulk Off-Take and Local Mandates. Use the SPV’s consolidated balance sheet to place factory-gate bulk orders for cement, steel, and roofing—bypassing retail surcharges—while mandating that at least 35 per cent of all state-backed housing and district assembly builds use CSIR-certified pozzolana cement and burnt clay bricks.

4. Institutionalise Customary Land-for-Equity Under Act 1036. Stop fighting compulsory acquisition wars over the 80 per cent of Ghanaian land held by traditional authorities. Scale the precedent set at Dedesua in May 2026, where Otumfuo Osei Tutu II released 200 acres of litigation-free stool land for the Green City housing project. Working through Customary Land Secretariats under Sections 14 to 18 of the Land Act, 2020 (Act 1036), invite Stools, Skins, and landed families to contribute litigation-free land into the SPV in exchange for a 15 per cent equity share of the fully serviced plots or commercial units within the finished estate—while strictly enforcing Bank of Ghana laws against pricing land and local labour in US dollars.

You cannot tax a nation into affordability while leaving a cartelised, high-cost supply chain untouched. Ghanaian workers already have GH₵79.8 billion sitting in pension trusts and a legal right under Act 766 to use it for a home. Until the state strips out the speculative markups, the infrastructure surcharges, and the financing mismatches baked into every square metre of concrete, any new National Housing Levy will simply fund another monument in the bush—leaving the Ghanaian worker poorer at the end of the month, and still without a key to a front door.

Sitsofe Mensah Companion 1: Executive Policy Brief Matrix

Sitsofe Mensah is a technology policy enthusiast and an associate of IMANI.