Mr. John Nimoh, Secretary of the Council of Indigenous Business Associations (CIBA) has called for effective enforcement of the provisions of the Rent Act 1963, especially with regard to the duration of rent advance payments.

He said the strict enforcement of the Act, which prohibits Landlords from demanding rent advances of more than six months, will help indigenous business to invest more into their businesses and also save.

Mr. Nimoh made the statement on Thursday during the Business Advocate show on GTV, where he was a panelist for the show on the topic, “Impact of Rent Law on indigenous businesses”. The Business Advocate show is a weekly business advocacy show organized by the BUSAC Fund in association with the Ghana Journalists Association and the Ghana Broadcasting Corporation.

He noted that many of the Association’s members, including Hairdressers Associations, Associations of Garages, Barbers, and Bakers among others, spent almost 80 percent of their capital on rent as they were required to pay between two and five years rent advance. Sometimes they had to pay the same amount again after the first advance period elapses.

This situation, he said, had led to the closure of about 500 of such businesses nationwide, leading to unemployment for about 2000 people.

“The sector employs even more people than government because we employ many people, including those on the streets. Some members are closing down due to rent problems leading to unemployment and people going back to the streets,” he stated.

He also attributed the high cost of rent to the influx of foreigners into Ghana’s retail sector where some of CIBA’s members who could afford to pay high amounts to the landlords for rent, operated.

He stated that CIBA had been engaging the Rent Control Department to solve the issues and had been part of initial stages of an ongoing review of the Rent Act, adding however that the Department had come up with a new draft document for review, which did not solicit the input of CIBA.

“Metropolitan, Municipal and District Assemblies should be innovative and create a light industrial area with accommodations for indigenous businesses to rent from them”, he stated.

Mr. Hafis Iddrisu, Rent Manager at the Rent Control Department of the Ministry of Water Resources, Works and Housing, said although some aspects of the Act could be described as irrelevant now, there were other aspects that were still relevant, thus the ongoing review was to address such irrelevant areas by coming up with contemporary ways of rent control.

He said the penalty for landlords who flout the no rent advance exceeding six months rule for instance, was not deterrent enough. According to the Act, those who flout it are currently fined about GH¢10.00, which allowed landlords to continue demanding more than six months advance from prospective tenants.

“A more deterrent penalty may ensure adherence,” he said.

He urged tenants who had problems with their landlords and vice versa, to file complaints with the department in order to ensure adherence to the rent Law, as the Department could not act if complaints were not made.

Mr. Iddrisu said the review process was at the stage where a Validation Workshop had to be held on the draft bill before it was sent to Parliament. However, due to delays in disbursements of its budget allocation, it had not been able to organize the workshop.

He assured tenants and businesses that the workshop would be organized by end of the year to allow the process to continue.