Ghana’s real estate sector has emerged as a beacon of opportunity for foreign investors, driven by political stability, economic growth, rapid urbanization and a legal framework that permits foreigners to own properties through leasehold arrangements. This investor-friendly climate has spurred a notable rise in foreign direct participation, particularly in prime areas of Accra and Kumasi.
Foreign investments have undeniably reshaped Ghana’s real estate landscape and delivered several macroeconomic and social benefits.Foreign developers have introduced world-class architecture and construction standards, particularly in neighborhoods like Airport Residential, Cantonments, Roman Ridge and Labone. These developments have improved roads, public utilities and contributed to urban renewal.
Job Creation
The real estate boom has generated thousands of jobs in construction, project management, property services, and allied industries. Ghana’s construction labor market has expanded so significantly that workers from neighboring countries, especially Togo, Nigeria and Benin, have been engaged to fill skilled and semi-skilled gaps.
Technology Transfer
The presence of foreign firms has exposed Ghanaian architects, engineers and developers to modern design, technology, and construction practices. Local developers are now adopting contemporary styles and efficiency-focused techniques—as seen in projects like CapeMay’s Signature House and Selton Skye.
Economic Diversification
Real estate has become a critical component of Ghana’s economic diversification strategy. In 2023 alone, the sector contributed approximately GHS 1.6 billion (USD \$121.2 million) to GDP, according to Statista (2024), helping reduce overdependence on traditional sectors like agriculture and mining.
Capital Inflow
The surge in FDREI has brought substantial foreign capital into the economy, supporting balance of payments, strengthening the cedi, and financing infrastructure and industrial growth.
Concerns and Drawbacks
Despite the benefits, the dominance of foreign investors raises critical concerns that demand policy attention.
Displacement and Affordability
The focus on high-end and luxury developments often sidelines the average Ghanaian. As prime city land is taken over by foreign-funded upscale projects, property prices soar—pushing middle-income and low-income earners out of central locations.
Low Local Participation
As evidenced, very few Ghanaian-owned real estate companies are competing in the high-rise and luxury segment. The capital intensity and access to financing give foreign firms a significant advantage, leaving Ghanaian players behind.
Capital Repatriation Risks
While FDREI brings capital inflow, a significant portion of returns is repatriated, which can limit the long-term financial benefit to the local economy if not properly regulated or taxed.
Urban Congestion and Planning Gaps
Rapid development in high-end enclaves without coordinated urban planning has led to traffic congestion, overburdened infrastructure, and inconsistent zoning enforcement in areas like East Legon and Airport
Residential.
Urgency for Regulation and Balanced Growth
The current state of FDREI in Ghana calls for urgent regulatory reform to ensure balanced growth and protect national interests. Some recommendations include:
Establishment of a Real Estate Regulatory Authority
To oversee licensing, enforce building codes, track ownership, and ensure compliance with local participation quotas.
Local Content Quotas
Introduce policies mandating joint ventures or minimum Ghanaian equity in large-scale foreign-funded projects.
Land Use and Urban Planning Review
Implement stricter urban planning laws and zoning enforcement to avoid chaotic development and protect community livelihoods.
Incentives for Local Developers
Provide tax incentives, subsidized loans, and land access for indigenous real estate firms to enable them to scale and compete effectively.
Affordable Housing Mandates
Require that a percentage of all new large developments be allocated for affordable housing to ensure inclusivity.
Transparent Property Registry System
Digitize and centralize land and property records to enhance investor confidence and reduce fraud.
Conclusion
Foreign direct real estate investment has played a vital role in modernizing Ghana’s urban environment and growing its economy. However, to fully harness its potential and ensure equitable development, Ghana must urgently establish regulations that encourage local participation, enforce urban planning, and align sector growth with national priorities. A thriving real estate market should be one that is globally attractive, yet locally empowering.
Source :Joucelyn Marigold -African Property Magazine
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