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Business News of Tuesday, 12 May 2015

Source: B&FT

‘PPPs critical in addressing infrastructure deficit’

The Minister of State in Charge of Public Private Partnerships (PPPs), Hon. Rashid Pelpuo, has said the increasing pressure on the country’s finances makes the use of PPPs imperative in addressing the growing infrastructural gab, which now stands at over 1.7 billion investments annually for the next 10 years.

PPPs, he said, are “a critical aspect of the country’s development, and knowing what it is to have infrastructure in a country, it is important that PPPs occupy the space that will ensure that the infrastructure gap is closed.”

He observed that there is a direct link between economic development and infrastructural development, saying that the more the economy develops, the better it is to create situations for infrastructural development.

The Minister, who was addressing participants at the 2nd Global Public-Private Partnership Conference in Kumasi, said infrastructural development when not taken care of would definitely reduce economic gains.

A significant portion of the country’s budget, he said, goes into wages of public sector workers since the Single Spine Salary Structure took off in 2012, making it difficult to free fiscal space for development.

“In 2012 for example we spent close to 70 percent of the total budget in paying salaries of public sector workers and as at now we are spending about 57 percent to support payment of public sector workers,” he revealed.

This, he said, leaves government with very little funds to undertake development projects, hence the need to partner the private sector in addressing the situation.

The 2nd Global Public-Private Partnership Conference, which was organized by the Ministry of Finance and Economic Planning in partnership with C-NERGY Global Holdings, sought to strengthen the skills sets within the District Assemblies across the sub-region to implement PPP projects seamlessly for accelerated development.

This year’s conference was held under the theme “Building Capacity to Support Local Infrastructure Development through Public Private Partnership.”

PPP Project Coordinator of the Ministry of Finance, Mr. Isaac Oware Aboagye, told B&FT that the program would help the various metropolitan, municipal and district assemblies, as agents of development, to gain the needed expertise in the use of PPPs in their development agenda.

He was of the view that as public and stakeholder engagement deepens on the use of PPPs, it would create the necessary understanding to help develop the country.

The Kumasi Metropolitan Chief Executive, Kojo Bonsu, said the bottom up approach which courts the involvement of the private sector is the most plausible approach to adopt to guarantee accelerated growth and development in the various districts.

“We see this conference as a unique opportunity to galvanize support from the local government and private sector to finance the development of our local markets, improve the sanitation situation, provide more comfortable and convenient transportation infrastructure and harness the huge potential in our tourism sector,” he said.

He said the need for PPP projects at the regional level in budding cities like Kumasi, Sunyani, and others cannot be over emphasized.

The expansion and improvement of infrastructure in the various regions, he added, would go a long way to bridge the national infrastructure gap and grow the national economy.