Gov't Invests US$50M
In its continuing drive to spread essential social services throughout the country, the Government of Liberia has unveiled plans for the construction of 5,000 housing units in four counties, costing some US$50 million. Beneficiaries of the project include Margibi, Grand Gedeh, Bomi and Lofa Counties where economic activities are currently concentrated, and
need for housing is apparent, the New Liberia reports.
Making the disclosure yesterday at the Ministry of Information, Mr. Samuel W. Thompson, Managing Director of the National Housing Authority (NHA) said the initial US$50 Million government investment in about 5,000 affordable housing units is under the NHA’s 150-Day Action Plan.
He noted that in most developed economies such as the United States, Sweden and South Africa, the housing sector is considered as an engine for economic growth and development.
Mr. Thompson did not say exactly when the projects will start, but added that the the deeds for lands at the New and Old Matadi Estates have been handed over by the land owners to the NHA, and that very soon the NHA will be mortgaging the housing units in the Matadi Housing Estates.
The NHA boss stated that the entity has concluded a research on some of the obstacles facing Liberia's housing sector, noting that previous Governments made efforts to address the inadequate housing situation in the country, which led to the construction of 2000 houses in the Amilcar Cabral Housing Estate on the Old Road, Stephen Tolbert Housing units in Gardnersville, the E. Jonathan Goodridge Estate in Bannersville and the New and Old Matadi Estates near the Airfield in Sinkor.
According to Mr. Thompson, to achieve its objective of making available more affordable housing to people throughout the country, especially in areas of intense economic activities, a careful study of the housing mortgage plan in the U.S, Sweden, Nigeria, South Africa and Kenya for reasons of best international practice, the NHA has decided to introduce in Liberia a housing mortgage plan involving public and private sector investment, with decentralization as part of the plan.
He added that it is the intention of President Ellen Johnson Sirleaf for government to use housing construction as an engine for economic activities in Liberia.
He added: "80% of housing units in the U.S. are under the mortgage system while the figure of the housing mortgage plan in Sweden stands at 60% and 37% in South Africa. We have made research on how they have been doing in terms of best practices", he said.
The NHA Managing Director indicated that under the mortgage scheme, which is a government private/sector partnership arrangement, people in the private sector join with government to build houses.
He said as an impetus to the scheme, since President Sirleaf assumed the leadership of this country people have been receiving their salary in bank accounts, and this will be a push to the scheme as the plan entails government putting up 20 years loan payment term of between US$250 to US$450 monthly plan.
"This will also be a way of government encouraging massive participation in the banking system. In Sweden 90% of debt service is paid by the private sector under a 'program debt' scheme and we believe program debt will be guaranteed by government," he added.
Talking about the economic benefits that the mortgage plan would entail, Mr. Thompson said like the Housing Trust Fund Plan in Nigeria which he highly recommends will work for Liberia, the banking and insurance sector as well as various types of the labor market in housing construction will also be involved which means job creation for thousand of Liberians with various skills.
Dilating further, Mr. Thompson stated that while Liberia and other developing countries have been focusing on rubber and iron ore as sources of revenue, developed countries such as the United States consider the housing sector as engine of economic growth and development.
He said on the issue of prudent financial management of the scheme, the President Sirleaf administration maintains a tract record for putting in place mechanisms for sound economic management, adding that the NHA has created the environment for people to own homes in Liberia.
Explaining why past efforts have failed, he pointed to the lack of cross-checking the profiles of investors, adding that the lack of checking the financial solvency of a Chinese investor to ascertain if they have the money, is one reason why this time around they are making background checks to see the profiles of several companies before awarding contracts to them. This time, money will be available for landscaping, and plans are underway to increase tax incentives for government, partner with the Liberia Electricity Corporation, the Liberia Water and Sewer, the Ministry of Public Works while the plan includes a new urbanization policy.