Remove duties, levies on building materials - Building contractors to govt

The Association of Building and Civil Engineering Contractors of Ghana (ABCECG) has called on the government to remove or significantly reduce duties and other levies on building materials to reduce costs. 

The president of the association, Anthony Klutsey, who made the call, lamented that the high cost of the essential products was hindering real estate development at the corporate and individual levels, as well as the government's affordable housing initiatives.

Speaking after an emergency National Executive Meeting of the association, Mr Klutsey said the cost of building materials had reached crisis level. Additionally, he stressed the need for the government to pay contractors' arrears and roll out well-targeted affordable housing schemes as urgent priorities. 

Research 

The president of ABCECG quoted research which indicates that approximately 30 per cent of the cost of cement, iron rods and other critical building materials was due to taxes and levies imposed by the government.

Mr Klutsey explained that removing those taxes and stabilising the cedi were crucial actions that could significantly reduce the prices of building materials and maintain them at lower levels.

“In the past, building materials were tax-free in Ghana, resulting in relatively low housing costs. However, the current situation is dire with numerous taxes imposed on these materials. The government needs to act swiftly to save the industry and its affordable housing initiative,” he stressed.

Mr Klutsey emphasised that without reducing the cost of building materials, the government's affordable housing plans would remain unattainable.  “Investors in affordable housing projects will walk away if building costs put houses beyond the reach of many workers,” he added.

He also criticised the concentration of affordable housing projects in Accra, noting that it was self-defeating.

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To Mr Klutsey, affordable housing projects should be decentralised to the districts, allowing those who truly needed affordable housing to access them. 

Housing projects

“Placing affordable housing projects in Accra, Kumasi, and other cities only benefits the wealthy who buy additional houses. We need to decentralise these projects to the districts and price them appropriately to attract those in need,” he said.

Mr Klutsey also lamented the perennial problem of delayed and non-payment for completed projects, causing significant hardship for contractors, some of whom had suffered serious financial and health challenges.

He urged the government to urgently pay all outstanding arrears and to only award contracts when there was money to finance them.

The ABCECG president expressed the association's willingness to engage with the government to find sustainable solutions to the myriad of problems facing the construction industry. 

Challenges

Mr Klutsey stated that addressing the challenges could absorb many young people into decent jobs, thus alleviating youth unemployment. He, therefore, urged the government to pay attention to these issues to prevent them from escalating into a national crisis with potential consequences for national security.