Understanding PPPs; Ghana’s infrastructure development: Going the PPP way

As an emerging middle-income country and an important player in West African trade, Ghana is graced with a remarkable opportunity to realize continued economic growth, ensure fair access to its growing wealth, and diversify and develop its economic enterprises.

Ghana has done its best to capture the benefits of international trade, doubling the value of its exports between 2003 and 2014. However, many of these exports are still raw natural resources, and Ghana can do better.

Export-led growth across economic sectors could help to close the trade deficit, stabilise the currency and provide jobs for Ghanaian youth.

In order to seize this opportunity to ensure genuine prosperity for the next generation, Ghana must rapidly build and maintain its economic infrastructure.

The underdevelopment of domestic transportation, utilities and information technology infrastructure has limited the growth of domestic processing and manufacturing and made the provision of services across distance needlessly difficult.

Strong infrastructure is key to prosperity.

Ghana’s infrastructural needs

The Ministry of Finance estimates that Ghana needs an additional $1.5 billion of infrastructure investment each year for the next decade to satisfy its infrastructure needs. Under budgetary constraints, the government needs to leverage its resources as best as possible to satisfy its investment needs.

The 2011 National Policy on Public Private Partnerships (PPPs) and the 2013 Draft PPP Bill can help to close the infrastructure gap. T

hese initiatives provide an initial framework for the use of PPPs to mobilize private sector capital in public infrastructure projects. PPPs complement government investment and enable more and bigger projects than the government could support on its own.

PPPs are a contract between the government and a private body whereby the private party agrees to design, finance, build, operate, m