The much awaited National Rental Assistance Scheme (NRAS) to provide rent loans to both formal and informal sector workers with verifiable and regular income has officially been launched.
GH₵30m injected into phase one
The first phase of the scheme to be implemented with GH₵30 million will provide eligible Ghanaians with a mechanism to pay low monthly rent.
6 beneficiary regions
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.
Qualification criteria
The eligible person must be a Ghanaian, 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.
GH₵100 application processing fee
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.
Rent to be paid directly to landlady or landlord
The rent will 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.
Rent to paid back to govt monthly
These loans will be repaid on a monthly basis by the beneficiary, not exceeding 30% of his/her household income, to match the tenure of the rent.
Management of the Scheme outsourced private company
The management of the Scheme has been outsourced to Rent Masters Ghana Limited, a private sector entity, which is responsible for the day-to-day operations of the Scheme.
Duties of the private company
The company will, among other things, handle customer application processes, disbursement of rent advance directly to landlords, as well as the preparation and submission of periodic reports on the implementation of the Scheme to the Project Management Committee.
Bridge between landlords and tenants
It will also serve as a bridge between landlords and tenants to satisfy the interest of both parties.
Past policies geared towards increasing access
Launching the Scheme, Vice-President Alhaji Dr Mahamudu Bawumia said successive governments had instituted housing policies geared towards increasing access to various housing options.
Concentration on ownership services
However, he observed that 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.
Providing meaningful shelter to citizens
The Vice-President said the Akufo-Addo-led Administration, as a people-focused Government, had been working towards providing meaningful shelter to citizens, which formed a significant part of government’s developmental goals to address the problems associated with the housing sector, especially rental housing.
Visit to Rent Control Department in July 2020
He recalled visiting the Rent Control Department in July 2020 where he noted the overall importance of the rental housing market in the country’s quest to increase access to housing options.
Landlords demanding two years rent advance
He said the problem of landlords demanding two years rent advance deprived many people, especially the youth, access to rental housing.
Planning started in 2020
Vice-President Dr Bawumia said in 2020, government started planning to introduce a new programme to bridge the information and financial gap between tenants and landlords.
Captured in NPP’s 2020 Manifesto
He explained that the ideas were captured in the 2020 Manifesto of the New Patriotic Party (NPP), and subsequently in the national budget.
Policy intervention to resolve the challenge
Therefore, the Government, acting through the Ministry of Works and Housing, established the National Rental Assistance Scheme as a policy intervention to resolve the challenge.
Enhancing tenants’ creditworthiness
According to him, the measures will enhance tenants’ creditworthiness and reduce the large rent advance requests by landlords.
Dr Bawumia stated that government has made significant strides as far as the housing sector and rent management of the country is concerned.
New Rent Bill before parliament
Government has submitted to Parliament for consideration and passage of a Rent Bill, to replace the existing Rent Act 1963 (Act 220).
When passed into law, it will enhance the service delivery standards of the Rent Control Department.
Rent cannot exceed one year
The Bill seeks to ensure that a landlord who demands the payment of rent “in advance for more than one month in a monthly tenancy, or a tenancy which is shorter than one month, or more than one year in a tenancy which exceeds one year, commits an offence” clearly identified in the Bill.
Protection for vulnerable tenants out-priced
It will also ensure that the rights of “vulnerable tenants” who have been out-priced by the uncontrollable hikes in the cost of renting accommodation are safeguarded.
Dr Bawumia commends Asenso-Boakye
The Vice-President commended Minister of Works and Housing, Mr Francis Asenso-Boakye, for his leadership in ensuring the roll-out of the initiative.
Data to improve collection of rent tax
He is hopeful that the data produced from the implementation of the Scheme will facilitate government’s efforts at expanding revenue stream through the improved collection of rent tax.
Rent Scheme made possibly by digitization
Dr Bawumia said the introduction of the 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.
According to him, these systems addressed, to a large extent, the gap between landlords, tenants and credit providers.
Cost of capital, and rising cost of building materials
Mr Asenso-Boakye, , cited limited land supply, cost of capital, and rising cost of building materials as having contributed to the difficulty in rising buildings in the country.
In view of this, he stressed 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.
Short to medium term market challenges in rental failures
According to him, it has become imperative to address the short to medium term market challenges in rental failures where landlords demand years of rent advance payments.
Consideration for selecting beneficiary regions
Mr Asenso-Boakye explained that the beneficiary regions were selected following data gathered by the Rent Control Department, indicating that they had a higher percentage of rent advance challenges.
Expected relief
He is confident that the scheme will bring a lot of relief to many Ghanaians.
Minister of Employment and Labour Relations, Mr. Ignatius Baffour-Awuah, said what often comes to mind when determining a minimum wage is feeding, clothing and accommodation.
Welfare of pensioners
Apart from workers, he said, another area that is often ignored although equally important is the welfare of pensioners.
Plea to consider vulnerable pensioners
He pointed out that pensioners are very vulnerable and it is at this stage that they suffer a lot of difficulties and appealed to those in charge of the scheme to give serious consideration to pensioners during the implementation of such schemes.
Pensioners earn below GH₵600
Mr Awuah said a study conducted showed that many of the pensioners in the country earned below GH₵600 a month, saying “So just imagine a person earning this money and asked to pay a rent advance of two years”.
General Secretary of the Trades Union Congress (TUC) Dr Anthony Yaw Baah, urged the implementing agency and the sector ministry to extend the scheme to the other regions soon to enable them to benefit from it.
He also appealed to them to prioritise women especially single mothers in the scheme and appeal that the houses be located at places where the children can have access to education
Mr Frederick Opoku, the General Secretary, National Tenants’ Union of Ghana, tasked Government to establish a statutory body called “The National Rental Housing Taskforce Group” to protect the scheme and ensure the enforcement of rent advance payment not exceeding one year when the Rent Bill is passed into law.
He called for a fair, transparent and credible application process and with no political colours to make it easier for the ordinary Ghanaian to access it.
Mr Richard Acheampong, the Scheme Manger, Rent Masters committed to a fair and just implementation
Interested persons can apply online to the Scheme for support through (www.nras.gov.gh) and send more enquiries on the scheme to info@nras.gov.gh
