Two-Year Rent Advance Strangles Cash Flow, Estate Developer Backs Reforms
By: Solomon Nartey Tetteh
Real Estate Developer and Engineer Joshua Amegashie-Viglo has described the move to limit rent advance payments as one of the most financially liberating decisions government can make for ordinary Ghanaians.
His comments come at a time when government is considering a policy to cap rent advance payments at one year.
Speaking on Business Breakfast on Zed 101.9FM, Mr. Amegashie-Viglo said the practice of demanding two years’ rent upfront severely restricts tenants’ cash flow and weakens their ability to invest or grow their finances.
“Paying two years in advance strangles your cash flow. You can’t do any other viable investment if you are not rich and famous because committing two years of funds to something that is not yielding capital to you is a terrible financial decision,” he said.
He explained that locking up large sums in advance rent ties down money that could otherwise be used for business, trading or savings. According to him, financially savvy individuals in Accra are increasingly opting for flexible rental arrangements, such as furnished apartments where tenants pay monthly rent alongside a short-term security deposit.
Under such arrangements, tenants preserve liquidity and maintain room to pursue other income-generating opportunities.
Mr. Amegashie-Viglo said if a person earns GH¢5,000 monthly and pays GH¢2,000 in rent, they are left with GH¢3,000 to invest, trade or save. With a steady monthly payment structure instead of a two-year lump sum, that individual can use the remaining funds to flip goods, support small businesses, invest in stocks or start ventures such as cocoa trading.
He added that if such a person saves just GH¢1,000 monthly, they could accumulate GH¢6,000 within six months, capital that can be deployed into a small business venture.
Mr. Amegashie-Viglo stressed that reducing long rent advances does not only ease pressure on tenants but also stimulates entrepreneurial activity by freeing up capital for productive use.
The Estate Developer noted that improved rental flexibility enhances financial mobility, strengthens household cash flow and ultimately contributes to broader economic growth.
