Visit of HUD Secretary Jackson

UNCLAS ACCRA 003001 SIPDIS SIPDIS E.O. 12958: N/A TAGS: EFIN ECON GH SUBJECT: Visit of HUD Secretary Jackson ¶1. Summary: Alphonso Jackson, U.S. Secretary for Housing and Urban Development (HUD),exchanged views on addressing Ghana's housing needs with President Kufuor and a range of government and private sector representatives while visiting Accra November 26-29. The Secretary highlighted the lack of secure title to land in Ghana as a SIPDIS major impediment to attracting investment in the housing sector and suggested Ghana explore ideas used in the United States such as the Low Income Housing Tax Credit to provide incentives to invest in low cost housing. Secretary Jackson invited the Minister for Water Works and Housing and other GoG officials to come to the United States to meet U.S. government and private sector representatives involved in the housing sector. See action request in paragraph 6. End Summary ¶2. Secretary Jackson visited Accra in response to President Kufuor's invitation to come to Ghana to share his views and expertise. While in Ghana, Secretary Jackson met with: President Kufuor; Minister of Water, Works and Housing, Hackman Owusu-Agyeman; Minister of Finance Kwado Baah-Wiredu; Central Bank Governor Paul Acquah; representatives from the real estate and banking sectors; and the local Habitat for Humanity chapter. He delivered a keynote address at a Regional conference on financing for affordable housing co-sponsored by HUD and UN Habitat, participated in the signing ceremony of a $30 million loan guarantee agreement between OPIC and Ghana Home Loans, one of the very few banks in Ghana that provide mortgage loans, and made a site visit to a slum area near Tema, Ashiaman Tulaku, that is a part of a GoG-UN Habitat pilot project supporting slum upgrading. The Secretary was accompanied by his wife, Marcia Jackson and HUD staff members. Mrs. Jackson, a former teacher, visited a local school to interact with the children and the parent's association and to make a donation of books and paper provided by the U.S. embassy, as well as educational posters provided by HUD. ¶3. Secretary Jackson delivered a consistent message to all his interlocutors. He emphasized that Ghana needed to ensure that investors and developers could secure clear title to land (note: currently it is extremely difficult to establish clear title to land in Ghana due to overlapping claims, traditional practices regarding control of land, and poor mapping and address systems. End note). Absent clear title, banks will be reluctant to lend. Secretary Jackson indicated there were many US-based developers who would be interested in joint-ventures in Ghana but the land title issue remains a major stumbling block. The Secretary also suggested the GoG might consider models such as the Low Income Housing Tax Credit, which provides tax breaks to developers in the U.S. who construct rental housing for low income people as a means to construction of affordable housing. ¶4. GoG officials and private sector representatives acknowledged the importance of secure land tenure. Both the MCA Compact and a World Bank project will address some elements of land tenure but Ghana has a very long way to go before land (or houses) can be used as collateral to leverage financing. President Kufuor and others noted that the government is, as an interim step, trying to assist through "land banks" for use by developers. Currently, the GoG has 50,000 acres of land, with clear title, available for residential development. However, GoG recognizes it needs the private sector to drive the process if it is to provide the estimated 500,000 housing units needed. Private sector real estate developers who met with Secretary Jackson suggested that bankers should be willing to lend SIPDIS in situations where a long term land-lease has been granted. Fifty to ninety year leases are easier to obtain than clear title in areas where land is held by traditional leaders. Secretary Jackson said that while that was logical in some respects, U.S. banks would not be willing to finance developers without clear title. ¶5. Secretary Jackson extended an invitation to the Ministers with whom he met to come with staff to the United States to learn more about various programs and approaches that have been put in place to promote creation of affordable housing and to meet with developers who might be interested in investing in Ghana's housing market. The GoG officials welcomed the invitation. ¶6. Comment and action request: The Secretary's visit was well received by GoG officials and the private sector, and his focus on land tenure issues in Ghana was on target. The Ministry of Finance has followed up with a request for more information about the Low Income Housing Tax Credit as an incentive to build affordable housing. Post would appreciate HUD assistance in providing that information. The press coverage of the visit was positive. End comment and action request. BROWN