Social Deregulation and Crisis: Otiko Djaba and the “Indecent Dressing can cause Rape” Hypothesis

Introduction

Rape is inhumane and a vice in most societies. The problem with rape can be likened to food poisoning. In most cases, the problem is discovered only after the harm has been caused.  Since it is difficult to identify a rapist or someone who is motivated to commit such a crime, pragmatism requires that potential victims be on the look out. Similar logic imposes responsibilities on pedestrians to be careful when crossing the road because, even when you are careful, technological failure and in particular carelessness on the part of a driver could lead to your harm or demise.  But sometimes, being extra careful could save your life.  Thus, reasonable care and minimum effort requirements from both the people whose actions can cause harm and the potential victims are principles in law.  Not to hold brief for anyone, it is reasonable to believe that this logic perhaps influenced the advice given by the Minister to the girls (students) during an event in one of Ghana’s second cycle institutions (Krobo Girls Senior High School), which has received wide spread critique from various corners.

I wish to start a series of articles on the “indecent dressing can cause rape” hypothesis, with the hope of raising a more fundamental issue – populism and societal deregulation - that would make it practically impossible for the Minister for Gender and Social protection – Ms Otiko Djaba - to win on this matter in this dispensation. In this first article, I attribute this line of reasoning to political ideological differences between the Minister and her critics that have deeper roots in economics. I will also explore the assumptions of the arguments of the critics and identify some the flaws in them.

Background

The context of the Ministers advice requires an understanding of her background and expertise. Ms Otiko Djaba is the Minister for Gender and Social protection. Prior to becoming a Minister, she was the National Facilitator for the Campaign for Greater Discipline under Former Vice President Aliu Mahama in 2004. She also has so many years of work experience as a Consultant in Children’s Rights and rural women’s development for Plan Ghana in extremely deprived rural communities in Sissala districts of the Upper West Region. So this is not a person who is completely ignorant of the need for social protection for all. Indeed, if we are sincere, this is a consultant in matters, perhaps, peculiar to her critics.

During her presentation in one of the female senior high schools in Ghana, the Minister in a motivation packed speech also advised the girls to dress decently. Verbatim, she said:

“In conclusion, I will like to say to you that be bold, be confident, be respectful. If you wear a short dress, it is fashionable, but know that it can attract somebody who would like to rape or defile you. You must be responsible for the choices you make because you are the future leaders”.

Public reactions to this part of her speech are mixed. While some people have decently disagreed with her, others have condemned and trolled her in the media, especially on almighty Facebook. I like to share some of the arguments first. Papa Yaw Ashon, a Senior Policy Analyst expresses shock at the narrow view taken by some people of the motivational and beautiful speech delivered by the Minister. Henry Ernest Baidoo-williams pulls out academic studies by Gloria et al. (1997) and others to support his hypothesis that “dress can cause rape”, with an emphasis on gender bias in perceptions about the causes of rape. This study according to him shows that “the most predominant perception for the causes of rape when all respondents, male and female, are given equal weighting, is ”female precipitation” which believes that the woman’s actions or appearance is what causes rape. Immediately following “female precipitation” is the so-called “feminist theory” which believes that rape is caused by imbalance in power between males and females. One would think, only men would find nothing wrong with the Minister’s speech. But, even woman like Jidi Ewurama Ocran share similar views, particularly in the spirit of preventing rape in a world of unequal information among rapists, potential rapists and victims.

However, the critics are perhaps more than the apologists. On his facebook wall, Dr. Kwabena Opoku-Agyemang expresses his disagreement as follows:

“I disagree with this notion that dressing causes rape. Men are able (or should be able) to control themselves in the face of 'provocative' dressing. Rape is not logical in any case; it's an act of violence. This argument is like saying that if a man enters a wrong hotel room and sees a woman in lingerie he is justified in sexually attacking her because her dressing provoked him. Some way kraa”.

In another post, he describes the apologists as:

“Patriarchal princesses and their male counterparts (who have nothing to lose in this debate apart from ego and unnecessary privilege)”.

Another critic, Mss Ess, submits that “…these narratives are arming rapists with a defense thinking they can get away and yes, many are getting away because some judges share the view too”. This narrative she points out is a BIG problem. For this group of critics, the Minister’s advice purports to shift the blame for rape unto the victim and seeks to exonerate the perpetrators. On the Feminist theory, some academics like Dr Kofi Boakye, a Cambridge trained Criminologist contends that narratives like ‘indecent dressing can cause rape’ are myths and goes ahead to support his claim with his own study entitled “Attitudes Toward Rape and Victims of Rape: A Test of the Feminist Theory in Ghana”. But this study did not set out to explicitly test the “indecent dressing can cause rape” hypothesis. It thus cannot be admitted as evidence against the likelihood of indecent dressing causing rape.

The common understanding despite these disagreements is that none of the contenders support gender violence in any form, whether against men or women. The basic line of disagreement can be seen in their attribution of the causes of rape. While the apologists postulate that “indecent dressing can cause rape”, critics beg to differ. Although an apologist of the hypothesis that indecent dressing can cause rape, I wish to focus more broadly on the implications of the views of the critics for social sustainability. I will do this by evaluating the ideological underpinnings of the views of the critics, which are closely linked to neoliberal thinking, which is associated with both good and evil in society. Think of the United States and the junk-bond-induced takeover mania and resulting scandals of the 1980s; the corporate scandals of the 2000s; the egregious increase in the pay gap between chief executives and ordinary employees; and the real estate mortgage bubble and ensuing financial crisis.

Leaving in abstraction: The neoclassicals, faulty assumption and reality

In the 1970s, lovers of market economies as a tool for organizing social life emerged strongly and currently dominate discourses in most fields. They rely on perfect information and market efficient assumptions to disapprove the need for market regulation by the state. Thus, driving home the idea of self-regulation, the epitome of the freedom movement. This ideology fundamentally argues that human beings make rational choices by maximizing utility and minimizing cost. They often support their claim with reference to the words of the father of modern economics, Adam Smith: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest”. Therefore, a cardinal principle of the neoclassical school of thought is that each person is capable of making better choices for him or herself on the assumption that they always have full information. In context, the neoliberal will typically argue that the girls and women in general are always capable of making the best decisions for themselves, and hence require no help in the form of social regulation whether formal or informal, such as the advice provided by the Minister.

Unfortunately, we live in an imperfect world with imperfect information and thus, the assumption of perfect information is flawed. Therefore, decisions that anyone can make are as good as the limited information available to them. So, instead of achieving full rationality, humans can only make do with “bounded rationality” according to Economist Herbert Simon. Bounded rationality is the idea that in decision-making, rationality of individuals is limited by the information they have, the cognitive limitations of their minds, and the finite amount of time they have to make a decision. The girls obviously do not have perfect knowledge of the motivations of all men – those who want to rape them, those who could be attracted to rape them and those who by some constraints would not rape them irrespective of their dressing. So, these critics who argue that indecent dressing cannot cause a man to rape a girl are thriving on this faulty assumption of perfect information.  The reality is that similar faulty assumptions in financial markets continue to contribute to financial economic crisis in many countries with debilitating implications for social sustenance. Memorable among them is the recent 2007-2008 financial crisis. This is because, individuals continue to make seemingly rational but more accurately “faulty” bounded rational decisions that continue to hurt them and society at large.

In his book, “What money can’t buy: The moral limits of markets”, Harvard Professor of Philosophy, Michael Sandel acknowledges the important role of market economies as a tool for organizing economic activity. He however, observes the increasing marketization of society based on these flawed neoclassical principles of perfect information and rationality as particularly problematic. This we see in the continuous marketization of dressing as neoliberal thoughts increase. This flawed idea of total freedom and no need for regulation has penetrated the social fibre of society to such an extent that it has entered into the “dress can cause rape discourse”.  The liberals or democrats assert that people should be allowed to wear anything they want, whether decent or indecent, so far as they are fine with it, not society.  I term this posture as SOCIAL DEREGULATION. This posture often thrives on the back of populism. Most people desire to disentangle the webs of social constraints imposed by social institutions like religion and culture more broadly, particularly in this dispensation. Populism and social deregulation like financial and economic deregulation is the order of the day. Some have pointed to Brexit and the election of Donald Trump as evidence of this global wave of ideology. Those who claim that indecent dressing can cause rape are also faced with the challenge of defining indecent dressing, which could vary greatly even among them.

Statisticians are dumb, not the critics

To the liberals, the hypothesis that “indecent dressing can cause rape” is flawed. They argue that even well dressed women and babies are raped. Unfortunately, this view is also flawed at many different levels. First, it is flawed in that the hypothesis that indecent dressing can cause rape does not imply that decent dressing cannot attract rape. On this basis, it is important to note that the Minister never said that well dressed women cannot be raped or cannot be victims of rape. In statistics, this requires a one-way (tail) hypothesis test, in which the critical area of a distribution is one-sided so that it is either greater than or less than a certain value, but not both. If the sample that is being tested falls into the one-sided critical area, the alternative hypothesis will be accepted instead of the null hypothesis. An example of when one would want to use a one-tailed test is in the error rate of a factory. Let's say a label manufacturer wants to make sure that errors on labels are below 1%. It would be too costly to have someone check every label, so the factory selects random samples of the labels and test whether errors exceed 1% with whatever level of significance they choose. Acceptable values are those below or equal to 1%.

Disapproving the Ministers advice on the basis that well-dressed women are also raped is a common flaw in most arguments for many reasons. First, it involves the substitution of the original hypothesis or question for another. For instance, such acts of substitution is synonymous to the popular “what is a bird?” analogy.  For example, if a person is asked, what is a tree? Those who do not know the answer but are well vexed in birds could start by saying that birds perch on trees, and so, what is a bird? They then go ahead to answer that question instead of the original question: what is a tree?

Second, it is important to note that this hypothesis “indecent dressing can cause rape” is different from saying that “indecent dressing causes rape”. The latter hypothesis can easily be falsified just by one past or present evidence of rape caused by indecent dressing. But, the former is practically untestable because it does not only require past and present data but also perfect knowledge of all future events and their probabilities, which lies in the remit of only God. This is another evidence of the ‘what is a bird” analogy. The critics appear to have created their own hypothesis and answered it.  Besides, the Minister’s suggestion only raises a question of POSSIBILITY and does not provide a PERFECT DEFINITION of a necessary causal link, which her critics assume. To support this, I liken the "indecent dressing can cause rape" hypothesis to a pedestrian crossing the road and ask myself why we look left and right before we cross roads, and not assume that drivers are at all times responsible for us? Is there not a possibility that with a little carelessness, a similarly careless driver could easily knock us down?

In this brief note, I have laid the foundation for a more critical analysis of the debate on the “indecent dressing can cause rape” hypothesis. In the next part of this series, I will address a more theoretical issue with social deregulation (which forms the foundations of views of the critics) and the future of our society.

Scrap the Rent Tax and Maintain the Real Estate Sales Tax in Ghana

After over 3 decades of policy vacuum, characterized by piece-meal attempts to recognize housing in some policy documents by succeeding Governments, a new National Housing Policy was promulgated in 2015. This article argues that the 8% existing Rent Tax should be scrapped while the VAT on real estate sales maintained for reasons discussed below. The new Housing Policy is premised on pro-market principles aimed at creating and encouraging private sector leadership in housing delivery. This view is crystalized in objectives 1 and 2 of the new National Housing Policy as:

1.     To promote greater private sector participation in housing delivery;

2.     To create an environment conducive to investment in housing for rental purposes.

Policy initiatives to achieve these objectives include:

1.     Providing fiscal and monetary incentives for increased private sector investment in housing infrastructure for those benefitting lower-income households. The details of these incentives are contained in the country's investment code;

2.     Reviewing the Rent Act, Act 220 (1963) to streamline rent regulations and empower the Rent Department to encourage investments in the construction of rental housing as well as the protection of vulnerable households from abuse by house owners.

However, Government fiscal policy appears to stand in direct contradiction to the ideals espoused by the new housing policy. Lets consider these contradiction below:

Rent Taxation

The introduction of the rent tax in the same year 2015, when the new Housing Policy with a beautiful vision was promulgated is a policy worth considering in terms of its potential effect on real estate investments in general and housing delivery in particular. The Income Tax Act, 2015 (ACT 896) was passed to introduce a Rent Tax - 8% in the case of residential premises and 15% in respect of commercial premises of the gross rent paid to Landlords/landladies - to be withheld by tenants and remitted to the Ghana Revenue Authority. Rent tax reduces investors’ cashflow and increases the risk of profitability, which could make investment in private rented housing relatively unattractive and thus render the vision of the policy elusive.

Most private rented housing in Ghana were constructed with private equity. In the strict sense of corporate finance, equity financing does not provide any tax deductibility advantage as using debt. Look at it this way. Interest payments on debt are considered a cost in the production of goods and services. So, most countries including Ghana allow investors to deduct interest payments from revenues before paying tax. Therefore, the capital structure of an investment matters, and using debt financing provides a tax saving advantage over equity. The effect is that the tax savings increase the cash flow to equity shareholders and thus increase the value of the investment, as per the popular Modigliani and Miller theorem. Therefore, given that most private rented housing is equity financed, most landlords would pay more in taxes compared to the case of using debt financing, which is simply unavailable or available at a extreme high cost to investor.

Coupled with low rent levels in Ghana, landlords are more likely to pass the tax to tenants in the form of high rents, if enforcement is effective. This effect would increase housing cost and thus the cost of living of most low- and middle-income households and reduce their standard of living, ceteris paribus. Considering the capital structure of real estate investments, particularly housing in the light of the 1.7 million housing deficits, it is first and foremost, welfare maximizing and secondly, a possible stimulant of new housing investments to scrap the 8% rent tax.

Nevertheless, I argue that the VAT on real estate sales should be maintained against the backdrop of calls by the Ghana Real Estate Developers Association (GREDA) to scrap it. Two principal arguments could be advanced in this regard. First and most factual, most houses constructed by the GREDA are already out of the reach of the median income household, below which we find the masses, even most middle income households. With average prices around US$100,000, and priced in dollars in the face of an incessant depreciation of the cedi, their clientele is cut in high-income households, expatriates, foreigners and residents living abroad, who earn superior incomes and currencies. A survey shows that more than 50 per cent of the clients of GREDA are foreigners and residents living abroad. Thus, this tax has little to no adverse effect on the ability of low and middle-income households (who constitute the majority of the populace) to afford their houses. It will serve government well to continue with this tax. In other words, the target clientele of GREDA are more likely to afford the additional 8% VAT on real estate. Thus, the government would benefit if it maintains the tax.

Should there be a need to review the VAT on real estate, it should not be an exemption for all real estate developers. Policy provides an indispensable avenue to promote affordable housing development to reduce the huge housing deficit. In this regard, affordable housing developers should be exempted from the VAT, but not luxury home developers. I must say that implementing such a policy requires a proper definition of affordable housing in Ghana and mechanisms put in place to monitor delivery. In Ghana, almost all real estate developers claim to be developing affordable homes although their prices a way above the median house price. The new Housing Policy defines affordable housing as:

“The ability of a household to spend up to thirty percent (30%) of its gross annual income on the rent or purchase price of housing where the rent or purchase price includes applicable taxes and insurances and utilities. When the annual carrying cost of a home exceeds thirty percent (30%) of household income, then it is considered unaffordable for that household” (Ministry of Water Resources, Works and Housing, 2015).

However, this definition only measures the “housing affordability” concept in affordable housing. It therefore says little about the definition of affordable housing and it is fraught with challenges especially because it contradicts the practice in the banking and finance industry, where 40% (maximum) of household income is considered a measure of affordability. Lets consider this situation for instance; would houses priced at US$100,000 be considered affordable housing (given the income levels in Ghana) just because someone can afford it? Certainly no!

The old Planning Policy Statement 3 of the United Kingdom (UK) acknowledging the conceptual difference between “affordable housing” and “housing affordability” defines the former as particular products outside the main housing market; and the latter as a measure of whether housing may be afforded by certain groups of households. These particular housing products according to the UK National Planning Policy Framework (2012) is the sum of affordable rent, social rent, intermediate rent and affordable home ownership provided to specific eligible households whose needs are not met by the market (Woo and Mangin, 2009); subject to rent controls that require a rent of up to 80 per cent of the local market rent (including service charges, where applicable). Eligibility depends on local authority allocation policies, local incomes and local house prices depending on the type of affordable housing. Also, Peter O’Brien of the Royal Town Planning Institute (RTPI) in the UK provides a quantitative benchmark, making reference to past EU definitions that equate what is affordable as 75 to 80% of the market price or rent.

Notwithstanding that affordable housing is priced below the market house price, the material quality and quantity of rooms and services are specified. According to the National Affordable Housing Summit Group in Australia, two main concepts in this regard: (1) "reasonable adequacy” in standard and location, and (2) “sustainability” are worth considering. The KPMG (2010) reveals that reasonable adequacy means a 300 – 1200 Sq. Ft. house in Indian, which varies in other countries. There is also the agreement on quality design standards as one of the chief measuring tools, although it makes affordable housing expensive (Quigley and Raphael, 2004). What then is the value of design in so basic the need as housing? A common view is that good design costs more, and that while architects add value and quality to buildings, they rarely add economy (Davis, n.d). Housing is not merely shelter, or basic protection from the elements; it must also bestow on its inhabitants a sense of dignity. To ignore this aspect of housing or to consider it a perquisite for those who can afford market-based rate housing is to invite both social and financial disaster.

Moreover, those who can afford these skyrocketing house prices are those who finance them with mortgages. They then enjoy the tax deductions on the repayment of their mortgage interests, which can be considered as government subsidizing housing for the rich and high-income households, rather than the low and middle-income households, who need it the most. Therefore, the VAT on real estate somehow offsets the interest deductions allowed if they use a mortgage. Again, this interest rate subsidy provides an avenue for government to use policy to promote mortgage financing for the burgeoning middle-income class in particular and raking in some more revenue if properly targeted and aligned.

In summary, I wish to propose to the incoming government that a comprehensive study of the fiscal policy on real estate investment and development be done for efficient taxation and efficient delivery of real estate in Ghana. On the surface, it appears that scrapping the rent tax and maintaining the VAT on real estate sales would be prudent policy. I also propose for a review of the definition of affordable housing in the National Housing Policy so as to ensure that standards are met and delivery easily monitored. Last but not the least, another study should be conducted to properly target and align interest rate subsidies in Ghana.

Kenneth A. Donkor-Hyiaman

Finance and Real Estate Economists

Property & Planning Institute of Technology

Housing Policy Reversionism and Contradictions in Ghana?

Housing Policy development can be traced as far back as the 1920s when the Dispossessed Person’s Housing Scheme was operationalized to provide some compensation to people whose houses were compulsorily acquired in the so-called public interest. After over 3 decades of policy vacuum, characterised by piece-meal attempts to recognise housing in some policy documents by succeeding Governments, a new National Housing Policy was promulgated in 2015. This brief article raises two main issues - policy reversionism and policy contradictions - for further consideration; shows their interconnectedness and how they combine to contradict the spirit of the current housing policy.

Housing Policy Reversionism

First, the issue of policy reversionism becomes clear after a review of housing policy change in Ghana from 1920 to 2015 (see Kugbega, 2015; Arku, 2009). Reversionism is the principle of reverting to the conditions, customs, ideals of an earlier era. This process is similar to reversionism and recidivism in theology and criminal justice theories respectively (Sarfoh, 2010).  In theology, reversionism is viewed as the process of a Christian backsliding after having been reformed. In criminal justice, recidivism entails the process of “reversion of an individual to criminal behaviour after he or she has been convicted of a prior offense, sentenced, and (presumably) corrected” (Malt, 2001:1).

So, what is the evidence of reversionism in housing policy development in Ghana? Between 1920 and 1984, housing delivery was largely state-led. However, the period was also characterised by reversionism. The Military Government led by the National Liberation Council (NLC) and the first civilian Government (Progress Party) after the overthrow of Nkrumah, liberalized housing policy through privatization, deregulation and non-budgetary allocations to subvented state enterprises. The idea was to encourage a private sector-led delivery of housing due to inadequate state resources. Privatization of state assets was however alien and unfavoured by the populace. Thus, coupled with economic hardship, ripe conditions returned the Military to power, led by the National Redemption Council (NRC) and subsequently the Supreme Military Council (SMC) I & II. It is believed that for populist reasons as a way of legitimizing their actions, these military governments reverted to state-led housing delivery in a grand style, despite inadequate state resources.

Secondly, during the Armed Forces Revolutionary Council (AFRC) regime (another military government in 1979), price, rent and exchange rate controls were stringently reinforced without recourse to legal systems (Jeffries, 1982). These draconian approaches and populism were meted out as punished to so-called economic saboteurs – essentially targeted at the rich, landlords and traders who were not necessarily rich (Sarfoh, 2010) - in the name of probity and accountability. Further, the Rent Act, 1963 (Act 220) forbade rent advance payments exceeding 6 months. Fast forward 2015, history is repeating itself. The Rent Act is currently under review. The Draft Rent Bill seeks to reform the existing rent regulations, remove inherent constraints on housing supply, while maintaining the protection it offers low-income and vulnerable tenants from abuse and arbitrary actions by landlords. One of its propositions according to the Deputy Minister for Housing, Mr Sampson Ahi, is to control rent advance period by reducing the rent advance period from 6 months to 1 month. This is a clear instance of housing policy reversionism to an ideal – rent control - established as debilitating to housing market development (cf Malpezzi et al, 1990; Willis & Tipple, 1991).

Housing Policy Contradictions?

Objective 1 and 2 of the new National Housing Policy are:

1.      To promote greater private sector participation in housing delivery;

2.      To create an environment conducive to investment in housing
for rental purposes.

Policy initiatives to achieve the objectives include:

1.      Provide fiscal and monetary incentives for increased private sector investment in housing infrastructure for those benefitting lower-income households. The details of these incentives are contained in the country's investment code;

2.      Review the Rent Act, Act 220 (1963) to streamline rent regulations and empower the Rent Department to encourage investments in the construction of rental housing as well as the protection of vulnerable households from abuse by house owners.

However, Government fiscal policy appear to stand in contradiction to the ideals espoused by the new housing policy. Two of such government actions are identified below:

Rent Tax

In the same year - 2015 - when the new Housing Policy with a beautiful vision was promulgated, the Income Tax Act, 2015 (ACT 896) was also passed to introduce a Rent Tax - 8% in the case of residential premises and 15% in respect of commercial premises of the gross rent paid to Landlords/landladies - to be withheld by tenants and remitted to the Ghana Revenue Authority. Rent tax reduces investors cashflow and increases the risk of profitability, which could make housing investment relatively unattractive and thus render the vision of the policy elusive.

Rent Advance Payment Reduction

As indicated earlier, there is a proposal to reduce the rent advance payment period from 6 months to 1 month. Already, most landlords require on average 2 years rent advance in the major cities because the 6 month rent advance may not be worth their investment. From an investment perspective, rent advance is a mechanism to reduce investors' risk and increase their initial yield, to help them recoup upfront some portion of the substantial investment they have made in housing. A reduction in the rent advance period increases investors' risk and reduces their initial yield, which make housing investment relatively unattractive. Empirical evidence shows that as rent control laws became restrictive, availability of rental accommodation declined with house owners unwilling to be subjected to excessive control over rent pricing (Sarfoh, 2010; Malpezzi et al, 1990; Willis & Tipple, 1991). Rent controls were historically adopted as political instruments whenever governments (the Socialist and Marxist political administrations- PNDC) wanted to garner support of the masses to legitimise their stay (Sarfoh, 2010). It appears the socialists and Marxists are back with a policy reversionism tactic in rent control, perhaps for the sheer populism to garner electoral votes since the polls are about two weeks away. A few important questions arise.

Pertinent Questions

1.      Now, in spite of the need to rake in more revenue for Government, how and in what ways does a rent tax and a reduction in the rent advance period help to achieve the policy objectives of the new National Housing Policy?

2.      Is the reversion to rent control an exercise of populism against the economic saboteurs – landlords and investors - or an act of exercise justice for poor tenants in a corrupt housing market?

3.      Was the new National Housing Policy dead on arrival?

Kenneth A. Donkor-Hyiaman, MPhil (Cantab)

Doctoral Researcher (Real Estate and Planning)

Managing Partner, MeTis Brokers (Private Equity Real Estate Investment Firm)

Housing Policy Contradictions in Ghana?

In 2015, a new National Housing Policy was promulgated after over 3 decades of policy vacuum (since the 1970s despite piece-meal attempts to recognise housing in some policy documents by succeeding Governments). Two of the policy objectives are:

1. To promote greater private sector participation in housing delivery;

2. To create an environment conducive to investment in housing
for rental purposes.

Policy initiatives to achieve the objectives include:

1. Provide fiscal and monetary incentives for increased private sector investment in housing infrastructure for those benefitting lower-income households. The details of these incentives are contained in the country's investment code.

2. Review the Rent Act, Act 220 (1963) to streamline rent regulations and empower the Rent Department to encourage investments in the construction of rental housing as well as the protection of vulnerable households from abuse by house owners. 

While the Government has embarked on some laudable housing projects in some respect directly and in partnership with the private sector, the effect of two major Government actions on the nation's ability to achieve these objectives require some careful analysis.

1. RENT TAX

The Income Tax Act, 2015 (ACT 896) introduces a RENT TAX - 8% in the case of RESIDENTIAL PREMISES and 15% in respect of COMMERCIAL PREMISES of the gross rent paid to Landlords/landladies - to be withheld by tenants and remitted to the Ghana Revenue Authority. Rent tax reduces investors cashflow and increases risk, which could make housing investment relatively unattractive.

2. REVIEW OF RENT ACT, 1963, (ACT 220)

There is a move to review the Rent Act in recent times. One of its propositions according to the Deputy Minister for Housing, Mr Sampson Ahi, is the reduction in the rent advance period from 6 months to 1 month. Already, most landlords require on average 2 years rent advance in the major cities because the 6 month rent advance may not be worth their investment. From an investment perspective, rent advance is a mechanism to reduce investors' risk and increase their initial yield, to help them recoup upfront some portion of the substantial investment they have made in housing. A reduction in the rent advance period increases investors' risk and reduces their initial yield, which make housing investment relatively unattractive.

Now, in spite of the need to rake in more revenue for Government, how and in what ways does a rent tax and a reduction in the rent advance period help to achieve the policy objectives of the new National Housing Policy?

Is the new National Housing Policy dead on arrival?