The booming real estate industry vs The ailing local furniture industry in Ghana
Updated: Jun 2, 2020
As the real estate industry is booming in Ghana we expect the same thing in the furniture industry because they go hand in hand. Whenever you build or buy a house the next thing is to furnish it . Unfortunately, the furniture industry is not well developed in this country.
The challenges faced by the furniture sector are enormous;
Competition : The local industry faces competition from countries such as China, Malaysia, Singapore and European Union etc.
Innovation: The reliance on innovation and design combined with increase in global trade and digitalization makes the sector more vulnerable . No research and innovation because of lack funds. The local manufacturing companies are not competitive. The likes of Kpogas, Agorwu are struggling. They are not innovative they only do the same kind of furniture. We do not expect the same type of furniture in almost every home .
Skills: The sector lacks the needed skills to operate effectively . Our technical institutes are not well resourced to train people in this area. As for the carpenters by the road side I do not want to spend much time on them because they will always let you down when you do business with them. Their finishing is not the best and they do not deliver on time at all. Assuming you have an apartment to furnish and someone must move in and you order from such people, they will disappoint you. They need more training in areas such as customer service, time management just to mention few.
Financial challenges: There is no cash for the local manufactures to expand. The banks are not really interested in helping our local industry. They are more interested in treasury bills in order to make life easy for themselves . They do not want to take risk.
Absence of cohesion: The sector does not have a strong force such as a chamber to organize, coordinate and deal with issues affecting the industry as we find in other sectors. No linkage or solidarity. We now have a lot of real estate companies and more coming up. Devtraco, Clifton Homes, Trasacco, Magna Terries, Emerald Properties, Salem Investment, Rehoboth Properties, Lakeside Estate, GHS Housing, Buena Vista, Rockhill Properties, Canal Properties, Morgan Properties, Castle Gate Estate, UT Properties, Imperial Homes, Devtraco Plus, Regimanuel Gray, Manet, SSNIT a very tall list but just to mention few. This industry is growing .
In fact in Ghana whenever a business starts everybody tries to venture into the same business. For instance a lot of people are into sachet water, micro finance, provision stores, roofing, glass window, mobile money, recharge card, food joints etc. We have all ignored a very important sector that is why the Government (Parliament to be specific ) went all the way to China to purchase furniture. I personally agree with them that they could not get what they wanted from the local market. With the influx of foreign nationals from all over such as Cote D’ Ivoire, Togo, Nigeria, South Africa, UK, France, Brazil, China etc we need a very vibrant furniture sector to cater for their needs.
Somewhere last year a Chinese contractor came to me looking for furniture for the new Judicial Complex in Accra. He wanted to furnish the whole complex with good and specific furniture. We could not provide. For my curiosity I asked him “Have you tried Kpogas? He replied “I have roamed the whole of Accra nothing”.
The biggest economy in Africa – Nigeria does not support the importation of furniture, it is totally banned. The population of Nigeria is over 150 million and yet they are able to have enough supply of furniture for homes, offices, hotels etc . In 2012 a Ghanaian working in Nigeria approached me to come and establish a furniture retail shop in Nigeria, my response was there is a ban on importation of furniture in Nigeria. Another person also came to me in 2015 and he was a Nigerian with the same proposal and I gave the same answer to him . They do not really know about the ban because the local industry is able to cater for the whole country .
Why can’t we do the same in Ghana?
The government supports local manufacturers and protects them fully and they are growing in Nigeria. We need to pay a proper attention to this industry before it gets out of hand. The furniture industry in Ghana has tremendous opportunity. For instance why should someone move from Takoradi, Kumasi , Cape Coast , Tarkwa etc to Accra just to purchase a beset or a couch? What is wrong?
Surprisingly there is a large number of small manufacturers of wood and upholstered furniture in this market. We do not have modern and stylish designs done in Ghana, you can only import them from Europe and elsewhere and it becomes very expensive due to import duties and other charges. When you go to Casa trasacco, Simbin, Una, Life style Gallery, Orca Furniture City, Blue Gallery, Horizon Furniture, Kingdom, Kpogas, Agorwu etc furniture is very expensive. There is no competition and control, everyone can price the products the way they like. When you do not have a choice you will buy.
The so called interior decorators spend a lot of money in furnishing apartments. The cost of furnishing apartments has gone up because of high cost of furniture. A young man working cannot afford a simple and quality couch for his living area. I meet a lot of young couples or singles who are interested in furnishing their homes and when they see the price of just a sofa set they panic . They walk into furniture shops shake their heads and walk away. May be they have to resort to the local guy at the road side who will delay in making just a sofa though that is not what you will like to have but you have no choice. Even the expatriates are finding it difficult to furnish their apartments on budget . Furniture manufactures and designers need to be lured from elsewhere Europe, Asia and America etc. How do we do that ? We need both Government and Private sector players .
Another important issue is lack of interior decorators and designers. We do not have enough even the few we have are not well qualified and they charge exorbitant fees.
I was looking for an interior design/decoration school in Ghana I could not find one .I was very surprised. We have fashion designers, architects but no interior designers. There are only a few who got their certificates from the UK and USA etc but not from Ghana. Those who do interior decorations are not qualified, they only do trial and error. Some have learnt event management and they use that as a qualification and experience .
The furniture industry is a very lucrative area. We need more investors as there are in the telecommunications, banking, insurance as well as the oil and gas industries. We need more competition and more organization in this sector. This can only work when an investor comes in to establish itself in Ghana. We need IKEA, Parisot, Kuka, Natuzzi and the rest. The demand is high therefore prices are going up day in day out especially when we have a currency which is very weak. We need a competent company with the skills and tools for modernization. The requirements for marketing and product development and product improvement. If not the industry will be left with the retailers to dominate the market with cheap imported and ready-to-assemble furniture.
Globalisation is a major issue here. It should come as no surprise that importing furniture is a major challenge for the local manufacturers. The trend towards imports has increased over the years and now accounts for a full 85% of the demand for furniture. Almost every customer looking for furniture wants something stylish. A friend of mine who used to live in the UK came to me when he was looking for a couch. He said “I am looking for something funky” I do not think the local carpenter can meet that requirement. Customers today are looking for great style and design. This has killed the local carpenter who is not innovative enough, he only knows one way of making furniture.
In the next few years, most carpenters would go out of business, including the likes of Kpogas. Unless a radical solution is found.
Opportunities for the furniture sector.
The furniture sector in Ghana must undergo a significant change to make it more export–oriented and to place a focus on upgrading quality, design and innovation. These will include restructuring and technological advances. This is where Kwame Nkrumah University of Science and Technology(KNUST) and the Poly techniques, Ministry of Environment Science, Technology & Innovation must come in, including business model innovations.
The main opportunities lie in:
Continuing investment in skills,design, creativity, research, innovation and new technologies both government and private sector hence Public –Private Partnership (PPP). This can result in new products which are in line with the changing population structure, lifestyles and trends, as well as with new business models and customer service. Research in advanced manufacturing technologies can result in the creation of high technology and knowledge intensive jobs, which would give the sector the attractiveness it needs to attract good brains. This could help rejuvenate the sector.
Synergies with construction and tourism could also be exploited, building on the sector‘s small beginnings. Specifically, the reliance on raw materials from sustainable sources. This could have a positive impact on the sector. Furniture Manufacturers need to come together and form a chamber similar to chamber of mines, telcos etc, Even though there are many of them, it is better than being on their own. Investors should look at this sector as a matter of urgency. Government should support the local furniture industry. The Ministry of Trade and Industry has a role to play in this. Dr Ekow Spio Garbrah, the sector Minister must know and he must do something about it. Let us go to Nigeria and find out how they have done it .
Banks should also come in with soft loan facilities for local manufacturers and carpenters. Today we have many people selling generators because of the power crisis. Can’t we get machines for our carpenters at affordable prices ? This will help them come out with clean and neat products and one way or the other, match the imported products from the retail shops most of which are chipboard or MDF, not even real wood but are very expensive. The price of a standard bed (chipboard) is going for Ghc 1800 and a local bed made of solid wood can go for Ghc 700.
During the recent flood in Accra and its environs, a friend was seriously affected and he lost everything except the wooden bed. He has other beds made of chipboard all were damaged by the flood but the one made of solid wood is still in good shape.
Why can’t we support our local industry. After all the money will remain in the economy.
Francis is a leading business development expert in West Africa and Francophone Africa.
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