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Business News of Sunday, 29 March 2015

Source: thebftonline.com

Funding pool drying up - Finance Ministry

The Ministry of Finance has noted that the funding pool for government’s projects is drying up and will need private sector funds to make up the gap.

The situation, the Finance Ministry explains, informed government to push through its public private partnership model to the core of the country’s development agenda in implementing critical capital projects.

The Director of Public Investment Division of the Ministry of Finance, Magdalene Apenteng said: “The traditional ways of providing funds for infrastructure development through regular budgetary allocations, donor support and concessional bilateral and multilateral loans, has proved to be inadequate and unpredictable.

“With Ghana attaining the status of a lower middle-income country recently, sources of concessional funding -- both from donors and development agencies -- have started to dry-up.” Mrs. Apenteng said this in an address read for her at a three-day training workshop for journalists and media practitioners at Cape-Coast in the Central Region.

The comments follow an earlier admission by government that several hundred million US dollars of donor inflows, constituting about 75 percent of donor pledges to support implementation of the budget, has failed to materialize -- leading to a gap in funding critical economic empowerment, poverty alleviation and infrastructure projects.

Last week, Finance Minister Seth Tekper said the push for public private partnership is to strike a balance between borrowing levels that will jeopardise the country’s credit rating and solving the overarching problems of infrastructure development.

Mrs. Appenteng said the private sector is needed to support the course of government in providing infrastructure projects, in particular, in a bid to facilitate the country’s socio-economic development.

She explained that the PPP arrangement is a long-term contractual arrangement whereby government taps financial, human and technical resources of the private sector for the delivery of infrastructure and services traditionally provided solely by government.

She noted that the arrangement ensures there is a significant degree of risk-sharing between the public and private sectors, adding: “Principally, a PPP enables government to provide better infrastructure and services by adopting some of the efficiencies and good practices of the private sector”.

She said the PPP model will free-up public resources that would have been used in such projects for other equally important uses; and the private sector, on its part, will derive benefits from revenue generated by the projects.

She said the understanding of PPPs can only be achieved through systematic public information and education through the media, and dialogue with key stakeholders - - “your task is not only to paint a glorious and beautiful picture of everything PPP.

“As professional and independent journalists, your objective assessment of the individual PPP arrangements and of the PPP programme as a whole could provide valuable information and insights to assist us, as the implementers, in improving the programme for the benefit of all Ghanaians,” she added.

Mr. Michael Awuah, Capacity Building specialist, Ghana PPP Programme -- who spoke on “Foundational Concepts” -- explained that in PPP a project addresses a one-time objective and lasts for a longer time, and that PPP is output-specified; with the public sector retaining underlying ownership of the asset and accountability for service delivery.

Mr. Ekow Coleman, PPP analyst, Ghana PPP Programme, said the PPP law has been drafted and is expected to go through the needed processes before being passed into law.

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