Mobilising private development flows

Magdalene ApentengDirector – Public Investment

13th November 2014

Presentation outlinea. Public investment management in Ghanab. Context and motivation for the private sector

& investorc. Instruments for leveraging private sector

financing – PPPs, equity funds, blended finance

d. Debt sustainability and development sustainability

e. Challenges and Conclusions

Country Overview• Land Area : 238,533 sq. km (2010

census)• Income Level : Lower Middle Income• Population: 25,904,598 (2013 WDI• Population growth rate : 2.5%• Real GDP growth: 7.% (2013• GNI per capita US$3,880 2013)• Headline Inflation : 8.8% (end of Jan,

2013)• Doing Business 2013

– Ease of doing business (rank): 64

– Protecting investors (rank): 49

– Enforcing contracts (rank) : 48

• Ghana has had 6 successful elections since 1992

Public investment management

• Efficient management and delivery of public investments for accelerated growth:

• Develop a national public investment policy. – Establish an appropriate policy framework to

guide public investment decisions; • Oversee the management of state

investments in SOE’s and Joint Ventures; – Monitor commercial and strategic investments of

Government;

Public investment management• Efficiently allocate resources for public

investments. - Prioritise and establish Database and gate keeping role;• Coordinate and implement the National PPP

program – policy, institutional, legal framework; provide transaction advisory role; monitor and evaluate projects

• Assist in the preparation and defining of various projects for the market

• • – onitor and evaluate PPP projects.

Motivation for investors

• Clear framework – well defined policty, regulatory and institutional processes –

• Law – sector laws and regulations;• Appropriate identified risk and mitigatio

factors • adequate project preparation activities; public

sector capacity to implement, monitor and evaluate projects and

• Specific government support – political commitment

Available instruments

• Instruments for leveraging private sector financing

• Public Private Partnerships (PPPs),• Equity funds;• Blended finance

Sustainability – debt and development

• Meeting the benchmarks - burden of state owned enterprises – escrow accounts

• Deregulation of pricing and subsidies • Establishment of the Ghana Infrastructure

Investment Fund – commercially viable projects

• Capacity building activities

Challenges

• Political commitment – strong sponsorship of projects

• Political dispensation – period and an appropriate investment policy for adequate prioritization and execution of critical projects

• Comprehensive capacity building and effective communication activities

Challenges

• Private sector capacity to also accept some of the risks – support from the development finance institutions

• Overall fiscal sustainability is required

Conclusions • Private sector participation could accelerate

the delivery of critical infrastructure;• Sufficient local capital funding• Policy framework• Institutional capacity• Balance risks and rewards

THANK YOU