Minister for Works and Housing, Mr. Francis Asenso-Boakye, has announced that a total of 1,105 Ghanaian workers from six regions have already benefited from the government’s National Rental Assistance Scheme (NRAS) to pay their rent.
This scheme, established to help cover the rent advances for Ghanaian workers, has thus far disbursed a total of GH¢13.78 million (GH¢13,785,597) to beneficiaries in the Greater Accra, Eastern, Western, Ashanti, Northern, and Bono East regions.
The NRAS was created in response to the increasing demand for affordable rental housing across the country.
Mr. Asenso-Boakye provided this information while responding to questions from Mr. Andrew Dari Chiwitey, a Member of Parliament (MP) for Sawla/Tuna/Kalba, who sought details on the number of beneficiaries and the total cost of the scheme’s launch.
The NRAS, which was initiated in January 2023, is targeted at individuals with regular incomes, both formal and informal, and aims to alleviate the financial burden of huge rent advance payments to homeowners.
Instead, beneficiaries pay their monthly rent to the scheme, making housing more accessible for a wider range of citizens.
In preparation for the implementation of the NRAS, the Ministry of Works and Housing formed a working team to design and establish the modalities for the scheme’s operation. They organized extensive stakeholder consultations, developed awareness materials, and conducted public sensitization campaigns on the scheme.
Regarding the scheme’s legal status, Mr. Asenso-Boakye clarified that while it lacks a specific legal framework, it is being implemented as a government policy.
Additionally, the minister stated that there is an ongoing legal inquiry into the case involving the Construction OAS Ghana Limited for the construction of the Saglemi Housing Project.
Due to these legal proceedings, he requested a deferral on responding to related questions, as providing an answer at this time could potentially prejudice the court’s decision.
In response to queries from Mr. Alhassan Suhuyini, an MP for Tamale North, on how an answer could impact the ongoing case, Mr. Asenso-Boakye cited legal advice from his lawyers, who recommended withholding comments on the matter until the court reaches a verdict.
He assured the House that once the court’s decision is finalized, he would provide the requested details.
The idea was captured in the 2020 Manifesto of the New Patriotic Party (NPP), and subsequently in the national budget.
Some GH₵30 million was allocated to the first phase.
This effectively removes the need for rent advance payment within six regions – Greater Accra, Ashanti, Western, Eastern, Bono East and Northern before being extended to the remaining 10 regions.
Ghanaians applying for support must possess a valid Ghana Card, be an adult of 18 years and above, have verifiable employment and earned income, verifiable bank statement or mobile money statement, and rent payable must not exceed 30% of the household income.
The eligible person is expected to identify a property of his or her preference and notify the NRAS of same through a formal online application, pay GH₵100 application processing fee, present two forms of Identity Cards and have the application verified within five to 10 business days.
The rent is then be paid directly by the Scheme Managers into the bank account of the landlady or landlord who would also have to register with the Scheme.
The loan is repaid on a monthly basis by the beneficiary, not exceeding 30% of his/her household income, to match the tenure of the rent.
Successive governments had instituted housing policies geared towards increasing access to various housing options.
However, those efforts were mainly concentrated on home ownership services and did not achieve the desired impact in addressing the market imbalances of the rental housing market.
The problem of landlords demanding two years rent advance deprived many people, especially the youth, access to rental housing.
This measure will enhance tenants’ creditworthiness and reduce the large rent advance requests by landlords.
Data produced from the implementation of the Scheme will facilitate government’s efforts at expanding revenue stream through the improved collection of rent tax.
NRAS was made possible because of the national identification system, a digital property address system and mobile money interoperability, which had practically given a bank account to all eligible Ghanaians.
The system addresses, to a large extent, the gap between landlords, tenants and credit providers.
It addresses also the short to medium term market challenges in rental failures where landlords demand years of rent advance payments.
Limited land supply, cost of capital, and rising cost of building materials have contributed to the difficulty building in the country.
The urgent need to provide support to lower income earning households and the youth to access the minimum standards of accommodation could not be over-emphasised.