Minister for Finance, Ken Ofori-Atta, has impressed on the International Finance Corporation (IFC) to increase its equity investments in Ghana aside from its technical support in mobilising for the Ghana CARES “Obaatanpa” programme.
He said the current level of IFC’s investment, which is under US$5 million per enterprise, needed to be increased to US$15million – US$20.0million to help create firms of critical scale required for sustained transformation.
“We understand that the IFC, through its new strategy, aims to invest about US$1.5 billion in the medium term to support the private sector. While this is welcomed, we note that more can be done, given the enormous potential in Ghana”, Ofori-Atta said.
Speaking at the opening of the two-day strategic retreat on the Ghana CARES “Obaatanpa” programme between the government and the International Finance Corporation (IFC), in Accra, Ofori-Atta said it was important that the IFC supported Ghana in realising the GHC100 billion initiative, a COVID-19 response and recovery programme to boost Ghana’s economy.
He said the workshop was, therefore, an important step towards re-purposing collective efforts to address the impact of the COVID-19 pandemic and empowering the private sector to seize the opportunities for stronger development impact in the county.
According to the minister, the significant shocks, triggered by the outbreak of COVID-19 in 2020, creating sizeable fiscal and external imbalances as well as unfavourable debt dynamics to both the public finances and the private sector, had brought about the Ghana CARES programme.
Economic transformation
The COVID-19, he said, had also placed “an era of profound urgency for economic transformation” upon the country, needing a re-adjustment to the uncertain times.
Ofori-Atta said the private sector was expected to contribute GHC70 billion out of the GHC100 billion Ghana CARES programme, an outcome that would ensure an effective response to the pandemic and beyond.
“We do this knowing that the private sector sparks the innovation necessary for Ghana to thrive; delivering close to 90% of the jobs of which about 80 per cent are from the informal sector, and most of the goods and services needed.
“The CARES “obaatanpa” programme, therefore, provides a mechanism to attract higher levels of private investments into the most productive sectors to create a dynamic national and regional economy. It actively promotes local and international investments, including the use of public-private partnerships, and supports the private sector to become a powerful engine for job creation for our youth.”
Ofori-Atta, therefore, called for the strengthening of the partnership between Ghana and the IFC to create markets and opportunities for the programme.
He said the partnership with the IFC should enable Ghana to provide decent jobs for the youth, while improving livelihoods for the people, adding that the partnership must be repositioned to optimise the potential of the over 8.5 million Ghanaian youth for economic transformation.
The minister said the need to address the over two million housing shortage and the challenge of rapid urbanisation was also critical.
Sérgio Pimenta, IFC vice-president for Middle East and Africa, commended Ghana’s “admirable efforts” at managing the pandemic and the economy under the difficult circumstances evidenced by relatively low fatality and economic growth above one per cent when most of the world’s economies contracted in 2020.
Vaccine roll out
He said he was also encouraged by Ghana’s commitment to roll out vaccination despite the global shortages.
“Especially for this interaction, I am reassured to see that you put in place a clear plan for economic recovery even before most vaccines were announced. That shows Ghana knows where it wants to go”.
Pimenta said Ghana’s clear vision in managing the era made it easier for the IFC to come in as a partner to support efforts to power the private sector to drive the recovery.
He said, therefore, the IFC would seize the opportunity to go deeper into the Ghana CARES plan, to understand the government’s top priorities, and ensure that whatever support they offered advanced the nation’s self-determined path to be economically stronger and more resilient than before the pandemic.
“Our objective is to streamline and bolster IFC’s contribution to the priority sectors under Ghana CARES,” he said.
Pimenta assured that Ghana would continue to be one of IFC’s biggest programmes in Africa and that in the last decade, the IFC had committed about US$4 billion to help the country improve healthcare, provide energy, unlock its natural resources, expand trade, leverage the new digital economy, and finance micro, small, and medium enterprises (MSMEs), adding that their current portfolio in Ghana was nearly US$2 billion.
