Gov’t wants PPP to bridge gap

Government has laid down strategies to court private sector businesses into involvement with the provision of infrastructure.

The move comes at a time when Government’s spending has overstretched its purse, creating a deficit gap that has become the bane of the economy.

The Minister of State-in-charge of Private Sector Development at the Presidency, Rashid Pelpuo, explained that the pressure on Government to provide infrastructural facilities which serve the public good has become unbearable for the state alone to shoulder.

This, he said, has pushed Government to tailor its policies toward supporting the private scetor to bridge the infrastructural gap.

“It is becoming very clear that our policy is drifting more closely toward partnering the private sector to ensure that provision of public good is assured, because pressure is being put on Government to do more big things on a tight budget within a financial year.

“The pressure has mounted to the extent that the private sector is seen as not only playing a role in establishing businesses and creating jobs, but also to be a partner in the provision of public goods.

“This has pushed us to desire developing an outline that culminates in a legal framework which ensures private sector businesses are assured that when partnering with Government, their investments will be secured and the risk elements minimised,” he said.

Mr. Pelpuo said this yesterday when he participated in the 2^nd Ghana Economic Forum in Accra.

He said a new development strategy for the public sector is being developed to ensure that the state’s assistance to the private sector is enhanced to enable them to play their role effectively in growing the economy. 

 “This is why we are working on the Public Sector Development Strategy II that will work with all stakeholders to ensure the necessary conditions for the private sector to thrive are assured,” he said.

Government’s invitation to the private sector to be involved in improving infrastructure facilities in the country comes at a time when lag in infrastructure has impacted negatively on business activities -- especially in energy and road.

The Africa Development Bank (AfDB) has said that the Government will need to commit close to US$2billion into infrastructure every year in order to maintain the country’s current growth rates.

The country’s economy last year grew at a projected 7.1 percent, which makes Ghana one of the fastest-growing economies on the continent.

However, Africa’s foremost multilateral bank has said that lags in infrastructure funding could derail the country’s growth prospects, especially in the transportation sector.

The Resident Representative of AfDB in the country, Marie-Laure Akin-Olugbade, said the inadequate supply of physical infrastructure -- which was Ghana’s 5^th most important weakness in the 2012 Global Competitiveness Report -- could be the country’s Achilles heel.

“In spite of Ghana’s impressive growth trajectory over the last decade, infrastructure deficiencies remain a major concern and obstacle to competiveness...This places Ghana far behind the best performing countries in Africa in terms of the quality of infrastructure.

“To maintain the current growth rates, estimates of annual infrastructure funding requirement range from US$1.8billion to US$2billion -- more specifically, roads, railways, ports and airports.

“The road network seems adequate but the relative quality of roads is poor (only 41% is rated as good); rural connectivity is poor and the major urban centres in the country are heavily congested,” she said. 

Source: B&FT