Renowned Ghanaian business magnate, Dr. Sam Jonah, has voiced serious concerns about the sources of funding behind Accra's booming real estate sector. Speaking recently, the Chancellor of the University of Cape Coast questioned the startling number of unoccupied luxury apartments that dot the city's skyline.
Empty High-Rises: A Sign of Something Amiss?
Dr. Jonah highlighted the presence of numerous high-rise apartment buildings in prime Accra locations like Airport Residential, Cantonments, and Labone. Despite their prime locations, many of these apartments remain empty. This situation, according to Dr. Jonah, raises significant questions about how these developments are being financed.
The Role of Banks and Loan Recovery
Dr. Jonah pointed out that in most countries, real estate developments are typically funded through bank loans. This creates pressure on developers to generate income and repay those loans. However, he finds it perplexing that banks haven't taken action to seize or recoup their investments from these empty luxury apartments.
“If you walk around my area, Airport Residential, Cantonments, or Labone , look at all the high-rise buildings going up. Everywhere in the world, developers go to the bank to take loans for those developments. Some of...” Dr. Jonah noted, suggesting a disconnect between the expected financial pressures and the apparent lack of action from lending institutions.
Illicit Funds Fueling the Boom?
Dr. Jonah's concerns center around the possibility that these luxury developments are being fueled by illicit funds, rather than legitimate bank loans. The inactivity of banks in pursuing loan recovery, despite the vacancy rates, further fuels these suspicions. The situation warrants closer scrutiny and investigation to ensure transparency and accountability within Ghana's real estate sector.
The remarks from Dr. Jonah are likely to spark further debate and investigation into the financing of Accra's luxury real estate market. His insights raise important questions about the sustainability and integrity of the sector's growth.