Out-Law News | 04 Mar 2014 | 4:38 pm | 2 min. read
The bill will “mobilise private sector support” for major infrastructure works – including stalled road and ports projects and the launch of a new national airline, the ministry said.
The announcement came as n International Monetary Fund (IMF) mission to Ghana urged the government to restore macroeconomic stability as an “essential step” towards private sector development and growth over the medium term.
On the PPP bill, the director of the Public Investment Division of Ghana’s finance ministry, Magdalene Apenteng, said last month that the proposed legislation would offer a long-term solution to infrastructure challenges “without overburdening the government budget”.
Apenteng said PPP, supported by the World Bank, would address a number of projects which had been delayed because of inadequate funding and planning. These included improvements to and the extension of the motorway linking Accra with the harbour city of Tema, expanding the port of Takoradi, on Ghana’s southwestern coast, and establishing a new national airline.
Ghana’s transport minister Dzifa Ativor said last month that the country needed a successor to Ghana International Airlines, which suspended operations in 2010. She said the government would collaborate with the private sector to establish a new carrier.
The IMF conducted its two-week mission to Accra last month. Mission leader Christina Daseking said Ghana’s economy slowed down “on the back of sizeable external and fiscal imbalances and energy disruptions” in the first half of 2013. She said: “Based on data for the first three quarters of 2013, the mission estimates growth of 5.5% – well below the levels of recent years.”
On the fiscal side, revenue shortfalls, overruns in the wage bill, and rising interest costs pushed the 2013 deficit to 10.9% of gross domestic product (GDP), versus a target of 9%, the mission concluded.
Daseking added: “The weakening growth momentum and inflationary pressures are expected to continue into 2014, calling for urgent measures to address macroeconomic imbalances. In the absence of further measures, the mission sees the fiscal deficit target of 8.5% of GDP at risk. This, combined with a weak outlook for gold prices, would also keep the current account deficit at high levels. The success of the government’s ambitious transformation agenda is contingent on restoring macroeconomic stability.”
The IMF said a detailed staff report on Ghana is “tentatively scheduled” for discussion by the organisation’s executive board in late April 2014.
According to African Economic Outlook (AEC), Ghana’s medium-term outlook remains healthy, with projected GDP growth of 8% (6.5% non-oil) in 2013 and 8.7% (8.9% non-oil) in 2014, which AEC said is “well above the average annual growth rate of 6.5% for the period since 2000”. Investments in the oil and gas sectors, public infrastructure and commercial agriculture are expected to drive this growth.
A report published in October 2013 by professional services firm PwC said Ghana’s transport infrastructure needed to be upgraded to meet the needs of a middle-income country. PwC said: “Following the successful commercialisation of its oil reserves, Ghana is in a position to raise additional public funding for infrastructure from its increased fiscal receipts and thus to address the country’s infrastructure needs.”