Land Banking, A Catalyst For Affordable Housing

Owning a piece of a country comes with its benefits. Like Gerald O’Hara said in ‘Gone With The Wind’, “The land is the only thing in the world worth working for; fighting for, worth dying for, because it’s the only thing that lasts”.


Land has been an important asset to man for centuries. Wars have been fought over it men have made a living out of it and crucially, it has served as a foundation for homes.
Ghana is one country that has however struggled with the management of its land resources. To be fair to the West African nation, it is not peculiar to it, as other sub-Saharan African countries experience similar difficulties. Aside the problem of a growing population, most African states are bedeviled with poor land titles.This to a large extent is the genesis of the continent’s housing problems. With respect to Ghana, it is customary to find a parcel of land being sold multiple times. This is exacerbated with the often slow court processes and land guard system many have chosen to employ.
The last report made on Ghana’s housing deficit pegged it at 1.7 million units. There have been calls on government to help remedy the situation. The Ghana Real Estate Developers Association (GREDA) has also been challenged to reduce the huge deficit. For government, this means the need to construct an estimated 170,000 units annually for 10 years. Since this would be an expensive venture for government, it has created an enabling environment for the private sector to fill this void. The establishment of a public-private partnership (PPP) policy and the recently out-doored National Housing Policy are a few indicators of the government’s commitment towards bridging the housing gap. For many estate developers however, land titles and cost are primarily the impediment.
Ghana’s land titling problem stems from historical practice. During the pre-colonial era, the customary practice was to have lands held by a group or community, managed by a chief, head of a family or stool. The colonial era ushered in the first land sector reforms. This new land tenure system was created in a bid to mirror Ghana’s with that of Britain. The new system came with its benefits, providing a means of business activities in the urban centers while rural areas still relied on the communal system. This new system however had its drawbacks.


The new system encouraged land disputes as a result of the commercialization in contrast with the communal system that was founded on the basis of religious beliefs.
The Independence era witnessed government acquisition of lands for uses such as housing, education and industry. It was through such acquisitions that enabled state agencies such as State Housing to develop affordable housing units during the 1960s. This era spelled the most successful period for Ghana’s housing sector.
Political and economic instability led to insufficient investment in Ghana’s infrastructure, especially that of housing. For instance, the number of persons per dwelling unit fell from 10.57 to 9.05 from 1960 to 1970. By 1984 however, it had increased to 10.1.
Modern reforms
The Land Title Registration Law, 1986 yielded dividends for the lands sector. Hitherto, lands were primarily in the custody of stools, skins and the state. Being the first land sector reform since the 1960s, it enabled individuals to hold titles to land. The idea was to reduce land related conflicts, streamline the land transaction process as well as encourage foreign direct investment.
Other laws and institutions were established to improve land transaction processes in the country. Chief among them was the establishment of the Lands Administration Project (LAP) in 1999. The first phase of the project began in 2003 and involved establishing customary lands secretariats, digitizing land records, establishing land courts among others. The second phase consolidated its predecessor by ensuring a reduction in cost of business and providing an enabling environment especially for investors. Even though many of these reforms have taken place, land titling remains a problem.
GREDA’s recommendation
The creation of land banks seems to be a suitable solution to Ghana’s housing problems. GREDA has with genuine cause called for the establishment of land banks to mitigate land challenges in the country. In a 2014 real estate report issued by real estate expert Lamudi, GREDA’s Executive Secretary, Sammy Amegayibor said the association’s two major issues were land and finance. Securing litigation-free lands is a challenge dawned on GREDA and as a result, the group adds a premium to the perceived risk.
It comes as no surprise then that many of such developers choose to target those in the high income bracket. Their rationale is clear. High costs mean higher prices. Higher prices mean only a few middle income earners can afford to purchase homes. Invariably, that would mean developers turn their focus to those who have a strong purchasing power. It would be naïve to suggest that this is the only reason Ghana lacks adequate housing for the middle class segment. However, the newly defined term of affordability (30 percent of one’s gross income) coupled with the rising costs serve as adequate reason to suggest so.
Land banking proposal
Land banking is the practice of aggregating parcels of land for future sale or development. The concept is to provide title free lands to the public in order to make them easily accessible and at reduced cost. Ghana has some form of land banking which is primarily administered by the state.



Kwame Ankapong, a lands administration officer at the Lands Commission said the government has the authority to acquire lands under the power of eminent domain, outright acquisition and vesting it in itself. There are a few private companies that have this system in practice. However to achieve the desired effect of affordable housing, there is the need for a more holistic approach.
Over 70 percent of lands in Ghana are controlled by stools, skins and families. Their influence means that they serve as the catalyst towards a more dynamic real estate industry. The government of Ghana, together with GREDA needs to involve leaders of such groups in stakeholder consultations to come up with a package that serves their interest.
One way of ensuring this is to resource the Lands Information Bank adequately to register all lands and properties that were not captured in its records. The registration process should take into cognizance the line of succession in the event that an allodial land title holder (an owner of lands independent of a superior landlord) becomes indisposed. This would ensure that not only are conflicts minimized, but encourage more confidence in the system among the stakeholders.
The next important step is to establish decentralized institutions under the Lands Information Bank in each district. These institutions would formally assume temporary control over the lands and release to real estate developers, commercial farmers, industries and other private investors. For the real estate industry, the district level land banking institutions would work closely with the metropolitan, municipal and district assemblies (MMDA’s) to release lands for future projects. Developers would be chosen on a competitive bid process to make it a transparent one. Emphasis would be placed on developers constructing affordable homes.
On the basis of remuneration, developers would apportion a percentage of their sales proceeds to the MMDAs and land title holders. The land title holders would get a greater proportion to give them an added incentive on the proposed land banking system. Lands released should serve the purpose of a medium-term leasehold. This would enable such allodial title holders to maintain a renewable income stream.
Human institutions never go without their flaws. The problem of misappropriation, mismanagement and corruption cannot escape the minds of citizens in the country. There would be the need to mechanize the processes involved to minimize the occurrence of human influence in such processes. As with all other state institutions, the land banking institutions should be made accountable to citizens through Parliament’s Public Accounts Committee.
The benefits to derive from such a system are endless. Providing affordable housing is only a small aspect of the greater perspective. Other benefits are a drastic reduction in the housing gap, improved productivity levels and a booming economy among others.