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.    

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