Infrastructure: Ghana more exposed to western dev’t finance institutions than regional peers
Ghana, compared to its peers in the Sub-Sahara African region, is more exposed to western development finance institutions such as the International Finance Cooperation (IFC) and European Investment Bank (EIB).
This is according to a recent report by Fitch Solutions on the country’s infrastructure sector.
Out of a total of 125 infrastructure projects spread across the African Continent and to be partly financed by western development finance institutions, 37 of those projects are in Ghana.
| Institution / Number Of Projects | Ghana | Burkina Faso | Cote D’Ivoire | Mali | Nigeria | Senegal | Grand Total |
| Agence Francaise de Developpement (AFD) | 3 | 3 | 1 | 4 | 7 | 7 | 25 |
| CDC Group | 1 | 0 | 0 | 0 | 2 | 0 | 3 |
| European Investment Bank (EIB) | 2 | 4 | 1 | 4 | 2 | 5 | 18 |
| FMO | 0 | 1 | 0 | 0 | 0 | 1 | |
| International Finance Corporation (IFC) | 5 | 1 | 6 | 1 | 9 | 6 | 28 |
| Japan International Cooperation Agency (JICA) | 7 | 1 | 1 | 0 | 5 | 1 | 15 |
| Kreditanstalt fur Wiederaufbau (KfW) | 0 | 0 | 1 | 0 | 0 | 0 | 1 |
| Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. (FMO) | 4 | 0 | 4 | 1 | 2 | 2 | 13 |
| Swedish Export Credit Corporation (SEK) | 4 | 0 | 0 | 0 | 0 | 0 | 4 |
| UK Export Finance | 11 | 0 | 6 | 0 | 0 | 0 | 17 |
| Grand Total | 37 | 10 | 20 | 10 | 27 | 21 | 125 |
According to Fitch Solutions, Ghana’s high exposure to western development finance institutions is due to its supportive legal regulatory framework for Public Private Partnerships (PPP), particularly in the infrastructure sector.
Currently, the country’s PPP projects said to be in the pipeline, is estimated at $8.4bn.
Aside Nigeria which has a PPP pipeline projects value of $9.6 billion, Ghana’s $8.4bn total market value of PPP pipeline projects, is the second largest in the West African sub-region.
Already, international finance institutions from the US, EU, UK and Japan, have pledged to finance parts of the country’s PPP infrastructure projects in the pipeline.
“Not only is Ghana relatively more exposed to Western development finance than its regional peers. Its government’s successful implementation of market-based economic policies in combination with its general foreign policy orientation – as last evidenced in its stance on the Russia Ukraine conflict – all make an increase in financial assistance from Western political actors more likely,” it said.
Sectors to significantly benefit from the country’s high exposure to international finance institutions include rail, ports, roads and utilities.
“In our view, PPP opportunities in Ghana will primarily arise in sectors previously exposed to such initiatives, like rail, ports, and utilities, though we note a growing focus on roads and highways as well. An ambitious pipeline for rail-investments will open a small number of high-profile opportunities over the medium term, with the potential for smaller investments growing as ongoing operations will widen near the end of the decade.
“Furthermore, due to high expected growth in international trade and a well-stocked project pipeline compared to other markets in the region, port construction will be a major driver of growth in Ghana’s transport sector,” it added.
