Ghana requires some $15 billion over the next decade in order to address gaps in its infrastructure, the Vice President Kwesi Amissah-Arthur said on Tuesday, after flooding in Accra last week exposed problems with creaking public services. According to him, the country requires about $1.5 billion per annum over the next decade in order to sufficiently address the issue. More than 150 people died last week in the capital when aging drainage systems collapsed after days of rains and a petrol station where dozens of people were sheltering exploded.
Given the government’s tight budgetary constraints, it was looking to Public-Private Partnerships to fund infrastructure investments. He also said, “We recognize the critical importance of infrastructure in driving economic growth but we are confronted with the constraints on public resources that require that we curtail public spending therefore it is necessary to turn to the private sector”. [1]
Infrastructure deficiency remains a major obstacle to growth . Ghana currently ranks far behind the best performing countries in Africa in terms of infrastructure quality (See Graph 8). Infrastructure was , therefore, cited as the dominant perceived barrier to development in the most recent World Bank Enterprise Survey in Ghana. During the mid – 2000s, Ghana’s infrastructure gap was estimated at about 7% of GDP and about half of this was associated with shortfalls in power sector alone. Recent robust economic performance and growing demand for infrastructure services in the face of inadequate investment is expected to have further widened the infrastructure gap. At 0.5%, the net contribution of infrastructure to Ghana’s per capita growth between 2001 and 2005 was less than the average of about 1% for the ECOWAS region as a whole. Significant shortfalls in transport have also been identified. For instance, the railway system has limited coverage (a triangle linking Accra – Kumasi – Takoradi), and serves only the southern part of the country. The capacity of Ghana’s two ports at Tema and Takoradi is under pressure resulting in delay and congestion. Ghana’s infrastructure constraint presents a major threat to growth and international competitiveness given the close link between the availability of good infrastructure and economic growth. Studies have estimated that barring the electricity crisis of 2006 and 2007, Ghana would have likely grown at 7.5 – 8.0% in 2006 – 2007 instead of 6%. [2]
Conclusion
In spite of Ghana’s decent economic growth in recent years, the country still faces significant challenges in its development trajectory, including productivity weaknesses, infrastructure gap, and capacity weaknesses and skills shortages among others. However, the country also enjoys many opportunities, which it is now poised to better exploit to consolidate its economic achievements, and quicken its rate of economic growth and jobs creation. [3]
Related references:
- http://af.reuters.com/article/ghanaNews/idAFL5N0YV2DJ20150609
- http://www.afdb.org/fileadmin/uploads/afdb/Documents/Project-and-Operations/GHANA%20CSP%20DRAFT%20FOR%20COMMENTS.pdf
- http://www.theafricareport.com/West-Africa/un-pledges-to-help-ghana-deal-with-chronic-deadly-floods.html
- http://in.reuters.com/article/2015/06/09/ghana-vice-president-says-some-15-bln-ne-idINL5N0YV22Y20150609
- http://www.sovereignwealthcenter.com/Article/3439517/In-Africa-SWFs-Seek-to-Bridge-Infrastructure-GapAnd-Make-Money-Too.html#.VXkNxudrXG0
- http://www.dailymail.co.uk/wires/reuters/article-3116827/Ghana-says-needs-15-bln-10-yrs-close-infrastructure-gap.html
- http://www.daargroup.com/daar-group/latest-news/vanguardngr-ghana-seeks-15bn-over-10-years-to-close-infrastructure-gap
- http://www.africaneconomicoutlook.org/fileadmin/uploads/aeo/PDF/Ghana%20Full%20PDF%20Country%20Note.pdf
- http://www.worldfinance.com/inward-investment/middle-east-and-africa/ghana-steps-up-infrastructure-investment-programme
- http://www.worldfinance.com/inward-investment/middle-east-and-africa/ghana-to-invest-in-infrastructure
- http://www.dailyguideghana.com/solving-ghanas-infrastructure-deficit-the-role-of-ppp/
- http://www.infrastructureafrica.org/library/doc/824/ghana-country-presentation
Anang Tawiah 