The development of Ghana has seen a steady growth in the past few years, with the Ghana Statistical Service pegging the Gross Domestic Product (GDP) of the country at 6.9 percent in 2014.

This seemingly impressive growth has however not translated into the provision of needed infrastructure to further augment the socio-economic development of a country newly promoted to the status of ‘lower middle income’.

A recent study of the infrastructure situation in Ghana by The Africa Infrastructure Country Diagnostic [AICD] Report 2010, shows that though the country is doing quite well economically, there remain serious shortfalls in the provision of infrastructure.

Budget for projects and activities in the running of the country have also experienced huge deficits in the past years, causing government to borrow sometimes beyond its limit—a situation attributed to the lack of adequate funds and other resources available to government to undertake infrastructural projects.

With Ghana attaining the status of a lower middle-income country, sources of concessional funding, both from donors and development partners, have reduced drastically.

According to the Finance Minister, Seth Terkper, the country needs about US$1.5 billion per year for the next decade to meet the demand for infrastructure.

He said, “Given the limited budget resources, the country’s huge deficit in infrastructure cannot be met by the public sector alone through budget allocations.”

It has, therefore, become a necessity for government to be proactive and find alternative ways to finance projects to make up for the infrastructural deficit of the country for national development.

The Public Private Partnership (PPP) programme offers the opportunity to attract significant funding and expertise from the private sector to develop infrastructure and provide services on behalf of government.

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

The arrangement ensures that there is a significant degree of risk-sharing between the public and private sectors.

Director of Public Investment Division of the Ministry of Finance, Magdalene Apenteng, said principally the Ghana PPP concept enables government to provide better infrastructure and services by adopting some of the efficiencies and good practices of the private sector.

Also, it frees public resources that would have been used for such projects for other equally important uses. The private sector, on its part, derives benefits from the revenue generated from the projects.

“Generally, we see the PPP programme as necessary and good for the country,” noted Mrs Apenteng.

This, she said, is due to the fact that government does not have enough funds to undertake all the needed infrastructural projects.

“It has worked for many countries, both in the developed and developing world–Britain, USA, Canada, India, Brazil and many others—and we must make it work for us here,” she added.

The provision of public infrastructure and services through the PPP initiative has typically been viewed as the responsibility of government.

To ensure the smooth and efficient operation of the new arrangement, a National Policy on PPP was developed and approved by cabinet in June 2011 and was officially launched by the government in October 2011.

The policy provides the framework for the development and implementation of PPP projects in Ghana.

It also serves as the basis for the preparation of the legal framework for PPP arrangements. A draft bill on PPP is now with government and is expected to be passed before the end of this year.

“It is government policy, therefore, to encourage the use of Public Private Partnership (PPP) as a means of leveraging public resources with private sector resources and expertise, in order to close the infrastructure gap and deliver efficient public infrastructure and services,” he said.

Mrs Apenteng stressed that it is important to note that the PPP arrangement significantly impacts on some core values which are different from the traditional relationship between public institutions and citizens.

Explaining further, she stated that services which have traditionally been provided free of charge for instance, may under a PPP arrangement be paid for.

Also, the work attitudes of employees in a public facility may need to change drastically when management of the facility comes under management of the private sector.

These factors make it critical for stakeholders in a PPP and the general public to understand what is at stake with the introduction and implementation of the new policy.

“Such understanding and appreciation of the new policy is necessary for the acceptance and sustainability of PPP projects,” she said.

Mr Terkper said government is committed to the accelerated development of the country and will ensure that the necessary environment is created to enable the private sector partner the public sector to provide the needed infrastructure and services for a better Ghana.

PPP projects cut across all spheres of the economy; from transport to health, business to community development, new government projects supported by the private sector are taking over.

The Asutsuare Bulk Water Project is one such project worth noting. It is expected to benefit the about three to four million people in the Accra and Tema Metropolitan areas.

The project, expected to be completed this year, will provide bulk water supply to the Accra and Tema water system and address the growing gap between demand and supply of water in the Ghana Water Company Limited (GWCL) service system.

The water from the project is to be produced in two stages; the first supply is expected to come on stream in 2016 and the second in 2018.

PPP is also playing an important role in the delivery of quality healthcare services in Ghana.

The Korle-Bu Teaching Hospital’s Diagnostic Service—another PPP project—is, for instance, a solution to the current issues that challenge the hospital’s laboratory and imaging services.

The delivery of all laboratory and imaging services across the hospital (with the exception of the Cardiothoracic Unit which operates independently of the hospital), including maintaining and operating the new facility, will be covered by the project.

The construction of the new international standard accredited facility and the introduction of robust performance requirements through the PPP contract should ensure a well maintained and efficiently operated service capable of meeting stringent output specifications.

The project, designed to encourage private revenue generation to offset public cost, is estimated at $24.5 million.

These are among the numerous projects being undertaken under the PPP initiative. Others include model markets, the Makola Market Project, Salaga Market Project, and Martey-Tsuru Community Development.

The development of sports and residential facilities, the Accra Plains Irrigation Project, Foreigner Identification Management System and modern pedestrian foot bridges are also part of the PPP projects.

The Takoradi Port Rehabilitation and Expansion, Boankra Inland Port/Eastern Railway Line Project and the Nungua Desalination Plant are all part of projects being undertaken under PPP.

There are a lot of benefits that could be derived from the PPP programme by both government and the private sector.

Mrs Apenteng disclosed that notable among the tall list of benefits are the accelerated delivery of needed infrastructure and public services on time and within budget.

She also observed that the initiative encourages the private sector to provide innovative design, technology and financing structures.

“It also helps to increase international and domestic investment and ensuring good quality public services and their wider availability,” she added.

Other benefits, she said, are real financial benefits reflected in reduction in the initial public capital outlay and a better utilisation and allocation of public funds.

“It has the potential to increase economic growth and wider employment possibilities, technology transfer and capacity building also improve operation and maintenance of public infrastructure,” she noted.

The World Bank is supporting the Government of Ghana to create a strong PPP policy that will bring mutual benefits to the parties involved.

To this end, they are helping in the preparation of the legal framework, systems and capacity of relevant bodies for the adoption of PPP as a major strategy to finance public infrastructure.

The Bank is therefore providing an amount of US$30 million over a four-year period, beginning from 2012 to 2016, for capacity building at various levels so that a more comprehensive programme could be put in place to fully implement PPP projects from 2017 and beyond.

Mrs Apenteng noted that the benefits of the collaboration between government and the private sector are evidence of government’s commitment to finding alternative ways of developing the country.

She said there might be an increase in tariffs but this will be matched by vast improvement in the delivery of services and the tariffs will be controlled by a public regulatory body, stating that tariffs/user charges for public services can only be adjusted by government.

In all cases, Mrs Apenteng assured, arrangements will be made to ensure that public services remain affordable under PPP projects.