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Investors encouraged to tap affordable housing demand in Ghana

Interview - June 27, 2013
A “field day” awaits developers looking to get involved in Ghana’s low-income housing sector. Theresa Oppong-Beeko, CEO of Ghana’s Manet Group talks to Upper Reach about the need for truly affordable housing, land issues, the company’s new interest in building office spaces and the key role of the private sector in advancing the country’s development.
Which sector would you advise potential investors to look into?

I think that the areas where we have issues are the low-income homes. That is why if somebody were coming into the country to invest, he or she would have a field day, because it remains untapped. However, in the case of high end or mid-range homes, I do not think we really have issues. I always tell the ministry that when they say that we have a shortfall of 1.5 million (sometimes they put 1.2m and other times they say 1.8m, depending on where they take the information from), they need to start by looking at why we have such a huge deficit. People make more money out of the high-end homes, and that is where most of the foreign investors are interested in going. But we have a shortfall in low-income homes. So any company coming to build pre-fabricated homes or steel construction homes would have a field day. In this case though affordable means really affordable.
I read that new state houses have not been constructed here in Ghana since the 1960s. Do you think that the government has any plans in the future to start building state homes again?
The government is talking about bringing state housing back. But when politicians talk, you always have to observe the setting of which the message is being delivered. If it’s during a press release, you can rest assured that more often than note, it’s simply a publicity stunt. Personally I wonder why we have been talking about it for all these years, and there’s not been any resolution. If you want it to happen, it doesn’t take much to get “the ball rolling”.
Maybe it is about a return on investment.
But the government can do it without needing a return on investment. We have houses built by the state in every advanced country. We did a bit of it during the early years of the company but it was a struggle to sustain it, hence the need to branch out into a higher income bracket. If the government is not willing to provide this housing, incentives can be given and the private companies will do it. The last government developed about 5,000 homes, but they have still not been completed. The government does not have to do it directly; they can provide incentives, and it will be done. If my costs are too high, then I will not develop, but if the government provides incentives, there will be a lot of companies that will be willing to develop. 

Maybe when they get more income from the oil and gas sector, which is growing.
At the end of the day, the government has an obligation to develop social housing.
I would like to ask you about the challenges in the real estate sector, such as litigation and complex land procedures. Do you feel this is a major problem in the real estate sector?
It is. Land issues in this country are related to the chiefs and the culture of the people. The government does not own land; it is entrusted in the hands of the chiefs. Each family in a village has their own land. In Europe, as well as other developed countries, you can just buy land and it is easy and simple. But it is not like that here. Based on our culture, if I had five kids, I would leave the property in the hands of the eldest, because the eldest are supposed to look after the others. Even if the land is in the eldest’s hands, it is not just for him/her. The eldest of the family is supposed to act on behalf of the family, but the problems arise as generations grow, i.e., children and grandchildren. You find that Mr A, Mr B and Mr C all have a right to the land, and that is where issues arise. When you come from somewhere else, you do not understand these land issues. But if you understand the family network system and deal with that, then you do not have issues. It is a problem therefore, but not a huge one.
Do you think that the developers should be responsible for building more sustainable and green houses in the future, or do you think that there should be state regulation to push for that?
This green thing has been going on for a while. Africa was all green in the first place, but then we tried to advance like in Europe. Our homes had thatched roofs and we did not use any fertilisers and chemicals. But now we are going back to what we were doing before, with organic foods. Sometimes I do not even know where the green agenda fits in, because we do not have a lot of industries here. Unfortunately for us, we are now moving away from the green side of things. I feel that we are just saying things because they are now in vogue.
China is a big investor in terms of infrastructure here in the country. How do you assess the need for foreign investment here in Ghana today in the real estate sector?
I think that Ghana is the best place for anybody who wants to invest. We have a welcoming culture – when somebody is a guest, you lay out the red carpet and do everything to make him or her comfortable. We have extended this part of culture to business as well. It is something that would be very hard to take away from us, because it is deep rooted. Investment is like a fresh book. We have not begun, if you ask me personally. We have barely scratched the surface.

How do you foresee the real estate sector in the years to come?
The industry is so tiny. As I said, we have a huge deficit, but we really need to define where the needs are. When you get out of Accra, it’s predominantly trees and shacks. As the economy grows, accommodation is needed, not just residential, but commercial, hotels for tourism, restaurants etc. That is a huge industry. It grows in line with economic development. The housing industry is very big, but sometimes things are so artificial that I do not know where we are going as a country. Some high-end homes do not match people’s incomes. They are achieving abnormal profits, but perhaps over time, these prices will stabilise.  
Manet Group was incorporated in 1994. You have built about 2,000 units. With your diversification strategy you have adopted in recent years, what is the key to the success of this company?
I do not know about success really. I am just doing my job basically. We still have a long way to go. We just have the joy knowing that we can provide homes for people, and people will make us comfortable in the process. We are OK. 
We would like to talk about your two-branch strategy of nationwide expansion and business segmentation. You are diversifying. What Manet Group subsidiary do you feel the most proud of and you envision that it will be more successful in the future?
I like to believe that each segment of the company stands on its own and brings something positive to the table. We are very proud of the area that provides housing, as we provide housing for people who would not normally be able to access it. It gives me joy that we can do that. We have to provide offices so that people can have a place to work. It is a new line that we are getting into. In July, we are going to start our next office block. But it takes a while. People who get the houses are very pleased with them, and the companies can have a comfortable place to operate from. If the companies are big enough, they will pay us as well. Being paid is so important. As you grow and you have more responsibilities and you have others to take care of, you cannot do things just based on your own passion. 
What about legal security here in Ghana? Can people be assured that they can recoup their money?
Oh yes. There are no issues at all. I personally believe that the controls that we should put in place for people to operate within the laws are not in place and the system is abused but we have the Ghanaian Investment Centre, which will give you the rules as to what you are supposed to do. You are entitled to getting your foreign direct investment back. 
I would like to ask you about leisure buildings. What about the tourism industry? 
It is a big industry. Other countries have advanced in tourism, but in Ghana, we have not at all. We have a lot of tourist sites, but it has not been done well so that people can come in and enjoy it. They need to build hotels at various sites, so that when people come there they can stay in the area. It would work if there was infrastructure surrounding the area. But in terms of places you can see in Ghana, there are a lot, but it is not being developed. 
We were speaking to the Honourable Minister of Tourism, who told us that private players will be essential to the industry.
The government has never been responsible for building any country in the world. Countries are more or less built by the private sector. But you need to make it attractive enough for private companies to get involved. Unfortunately, it has not been done. They need to create incentives for locals and foreigners.
What role will Manet Construction play for roads and highways as there is such a strong need for this type of construction?
I am not very keen on relying on the government, so Manet Construction is more involved with estates and internal roads. We are contemplating pursuing some government contracts but the government needs to make things a little easier to ensure a fluid process and ensure speedy/punctual payments of executed projects. 
Do you have any plans for international expansion?
Manet has been invited by Burkina Faso, Mali, Liberia and a few other places. My children might, but not me. I have not thought about which market I would be more attracted to, but I have told my children that when they want to go, they can. I intend to stay here.
Ghana and the UK have very strong ties. Commerce is expected to double by 2015. What are your views on the more fruitful historical relationship between the UK and Ghana?
At the end of the day, they are our old colonial masters. I am more comfortable in England than anywhere else outside of Ghana. I do not think that England and Ghana have any issues at all. An Englishman is as free here as they are there. If anyone wants to buy a second home, they want to buy it in London, or send their kids to school there. 
You have recently been named as the second most influential person in Ghana. In 1999, you were named the Marketing Woman of the Year by the Chartered Institute of Marketing. You have a never-ending list of awards. Do you think that you role as a woman entrepreneur here in Ghana can help improve social rights, particularly women’s rights?
A lot of people tell me that I am their mentor. I have always been concerned with what I do, and I believe in equal opportunities. I do not believe in marginalising one group in favour of the other. But in our culture, a girl or a woman is always at a disadvantage, from the very beginning. They are brought up to be a responsible wife and mother, and no matter how educated you are, you must be that. If a family has less financial resources, the girls will be taken out of school, and the boys will stay. This culture does not help girls compete well, because you are not on the same playing field. There is a gender gap, which is improving over the years, but it will take a while. But they will have to strive a lot more for the foreseeable future. The stumbling blocks are there, so you have to push yourself harder
Peter Drucker used to say that the best way to predict the future is to create it. You used to build houses for low-income families. How does it feel when you are changing the future of many families?
As I said before, I have a passion to help out, and I did. But now the company has reached a point where other parties are involved and the company must operate profitably. I started the company based on the passion to provide homes for families who ordinarily would not be able to afford their own home at an early stage in life. But as the company grew, so did its responsibilities. It is the government’s duty to provide social housing. We have done our best to alleviate the situation but we believe we have paid our dues.