Tuesday, February 11, 2014

Ghana Infrastructure Fund plan takes off

By Edmund Mingle
Arrangements for the establishment of the Ghana Infrastructural Fund (GIF), to boost the development of infrastructural projects in the country, kicked off yesterday with a round table discussions among major stakeholders.

From R to L-- Ato Ahwoi, Vice President Aamissah Arthur,   Finance Minster Seth Terkper amd Arthorney General, Mrs. Marrieta Brew Appiah-Oppong
  












The discussions, organised by the Ministry of Finance and Economic Planning, offered the government, private sector players, financial institutions and development partners a common platform to discuss the creation of an effective framework for the fund.


The introduction of the Fund, which is captured in the last budget, aims at ensuring a robust preparation, execution and management of infrastructural projects required to enhance the growth of the economy.

Meanwhile a five-member GIF Advisory Committee, chaired by Mr. Ato Ahwoi, has been formed to, among other things, facilitate the drafting of a legislative instrument on the Fund to be tabled before Parliament for consideration.

The meeting, attended briefly by Vice President Kwesi Amissah-Arthur, discussed, a number of critical areas for the framework of the GIF such as its investment objectives, as well as its legal, governance and operations structure.

Seth Terkper the finance Minister, in setting the tone for discussions, explained that the establishment of such a fund, was critical in view of the need to mobilise adequate resources to improve the country’s infrastructural base urgently required for economic growth.

That, he said, would enable the nation to reduce and effectively manage its external debt since the fund would reduce government’s reliance on foreign loans for the execution of projects.

With regard to the possible sources of funding the Fund, he, apart from the contribution from the Valued Added Tax, the Petroleum Revenue Act would be reviewed to contribute to the GIF.

He gave the assurance that the fund, to be used to support projects in both the public and private sectors, would be independently managed in a transparent manner.

Measures according to him, were being taken to avoid shortfalls in the implementation of other public funds, adding that effective financing sources would be developed to ensure its sustainability.

“There is need for synergy between the GIF and other funds, as well as commercial facilities.
“We believe that between two to five years, we would be able to demonstrate that we are a country that can use smart mechanisms to effectively manage our debts,” the Minister assured.

Satheesh Sundararajan, Director of Public-Private Infrastructure Advisory Facility (PPIAF) at the World Bank, sharing global perspectives on infrastructure funds, urged Ghana to ensure that “there is a pipeline of well prepared projects” to be supported by the fund.

He noted that the absence of well planned projects had made it difficult to ensure efficiency in the management of such a fund.

“GIF could be very helpful to Ghana’s infrastructural development agenda,” he said, and urged the government to adopt the best financing options for the fund.

Dr. Anthony Akoto Osei, ranking Member on Finance in Parliament, for his part, lauded the initiative, saying it would help to address the problems of project financing.

To avoid the mistakes of the past, he stressed the need for properly planned projects to be supported by the fund, adding that without well thought out projects, it would be difficult to mobilise resources for the fund, while the GIF could also be misused.

“We need to develop our capacity in project preparation,” he said.    
end

Friday, February 7, 2014

National Service Allowance up by GHc 107

By Edmund Mingle
 The National Service allowance has been increased from GHc 243 to
GHc 350.

 According to the Ministry of Education, the increment, which takes effect from January 1, 2014, was to motivate personnel to give of their best.

Samuel Okudzeto Ablakwa
Samuel Okudzeto Ablakwa, a Deputy Minister of Education in charge of Tertiary, who confirmed the increment to the Ghanaian Times yesterday, said it followed a request from the National Service Board.

He said the Ministry forwarded its approval of the increment to the Ministry of Finance which also granted it.

He said the service allowance had not witnessed any major upward adjustment for a few years, saying the Ministry deemed it critical to increase it for the benefit of the service personnel.

“We believe this would motivate the service personnel to accept postings and perform creditably,” he said.

 END

Cabinet Approves $600m Atuabo Port Project

By Edmund Mingle                                                              

CABINET has given approval for the establishment of the 600-million-dollar Atuabo Free Port project in the Western Region, which is expected to create more than 2,000 jobs.
Lonrho's Free Port in Luba, Equatorial Guinea

The construction of the free port, being promoted by Lornho, a leading British firm, will make Atuabo the West African hub for the servicing of vessels, especially those operating in the oil and gas industry.

Cabinet’s approval, which was confirmed by Energy Minister, Emmanuel Armah Kofi Buah to the Ghanaian Times yesterday, follows the completion of successful preparatory works which included feasibility studies, acquisition of land, productive community engagement and Environmental Impact Assessment.

Following Cabinet approval, Parliamentary ratification is in process following which , the active construction works are expected to take off later this year.

The project has been structured to be 100% funded by the private sector and without the requirement of a sovereign guarantee or funding from the Government of Ghana. 

 Steven Gray, Development Director at Lonrho Ports, explained to the Ghanaian Times that the government had negotiated that in addition to the Government of Ghana’s free carry of 10% of the project, a further 35% of equity is to be made available for Ghanaian institutions. This is to secure a 45% Ghanaian participation in Atuabo Free Port. The Port’s Governing Board will be chaired by a person appointed by the Government of Ghana.

This is to secure a 45 per cent Ghanaian participation in Atuabo Free Port,” he said, adding that the Port’s Governing Board would be chaired by a person appointed by the government.

He further explained that “this is a significant private sector initiative that reflects the international appetite for private sector investment in infrastructure projects in Ghana, such that no capital cost will be incurred by the Government of Ghana, and the project is totally off the government’s balance sheet,” 

He said, that Lonrho has spent an initial US$15 million dollars to undertake all the pre project feasibility studies, land acquisition and other preparatory works to ensure the project able to attract private sector funding.

Ghana, he said would be the ultimate beneficiary of the project, indicating that “once operational, the government as an equity shareholder in the project will earn dividend and royalty payments,” in addition to the thousands of jobs and skills transfer for Ghanaians.

Apart from benefits to central government, the chiefs and people of the area would also benefit the company has agreed to use the leased land as the Atuabo community’s equity in the project.

He said as a condition from Cabinet, the name of the project had to be changed from Lonrho free oil and gas services port to Atuabo Free Port as a way of promoting the economy of the region.

According to Mr. Gray, the project, which has been welcomed by chiefs of Atuabo, “is a development that can expand the economic opportunities of Ghana as an attractive destination for foreign direct investment into West Africa for the oil and gas sector.”

In addition, he said the project, which has been designed to provide the necessary infrastructure to support oil and gas companies to develop and enhance local content, has no indefinite exclusivity, since it does not prevent the establishment of other services ports in Ghana.

The Atuabo Free Port Complex, which would be operated in collaboration with the Ghana Port and Harbours Authority and other relevant agencies, would provide support services for the offshore oil and gas developments in Ghana as well as providing the infrastructure for companies wishing to offer services to their other Oil and Gas clients in the region.

Services to be provided by the Free Port to the oil and gas industry include as Logistics Supply Bases, offshore fabrications, rig and ship repairs, modification, maintenance and life support operations.

It supports the government’s Medium Term National Development Policy Framework dubbed “Ghana Shared Growth and Development Agenda 2011-2013” which calls for spatial planning to encourage developments that bridge the spatial divide between the traditional economic growth points to other locations around the country and relieve the perpetual problem of congestion of the Ports in Ghana. 

The project’s concession agreement was negotiated by Lonrho with the Cabinet sub-committee involving Ministries of Petroleum & Energy, Transport, Finance & Economic Planning, Trade & Industry, Foreign Affairs & Regional Integration, Justice & Attorney General, Ghana Ports and Harbours Authority, Ghana Revenue Authority and Ghana Free Zones Board, before the full cabinet approved it.

The project begun in August 2011,with the signing of a Memorandum of Understanding between Lonrho and the government for feasibility studies which was funded by the former.
Lonrho currently operates in 18 African countries in the fields of infrastructure development, transport, agribusiness, hospitality industry and support services.
As part of its local content plan, Lonrho would offer skills development training for artisans in the area to be engaged for the construction process, while it has a comprehensive livelihood restoration programme for the communities directly affected by the development of the port. 

In addition, a Development Assistance Trust, which would be transparently funded as part of the land lease arrangements with the Stool, would be created to focus on investing into social infrastructure facilities such as schools, clinics and community centres.

Also, the company intends to support small scale enterprises to actively participate in the project which is expected to offer more than 1,000 jobs to the locals.

 END