A Senior Partner at AB & David, an Africa business law firm, Mr. David Ofosu-Dorte has urged the government to place a lot more emphasis on public-private partnerships, given the government’s expenditure constraints going forward.
He made this remarks in an interview yesterday, January 14, 2021.
According to Mr. Ofosu-Dorte, after surveying the country’s options to funding capital expenditure, the public-private partnership is about the only proper means for the government to finance its projects without largely resorting to the already burdened public purse.
However, he warned about the excesses of government officials abusing such processes which turn out to be a disincentive for investors.
“… it has been on our books forever, for over two decades… but, finally, I think we are coming to the realization that we need to be a lot more focused on that. The reason is that, that is about the only way to finance capital expenditure without massive recourse to the public purse and bloating the public purse.
“But, we have to get it right, because the other thing that is a downside of it is that, it also is a means for chronic capitalism and for people in the corridors of power to be able to get projects for which they have no experience for, and that ends up driving away the real investors.
“So, if we do get it right and, if we float the projects in a competitive manner, we do not wait until the very last minute which is what tends to happen. If we start early and go through all the processes, I think we can get a lot of infrastructure funded.”
He further explained that, the country’s position in the continent as regards being host to the secretariat of the AfCFTA gives Ghana the leverage of becoming a commercial capital for the whole continent. This also tends to position the country as a logistics hub and therefore doing infrastructure in Ghana becomes an attractive proposition for investors.
This notwithstanding, he raised a bit of a concern on government’s part to raise funds for such partnerships. He maintained that unless government would be able to widen the tax net, that alternative also pose challenges for the government. Aside that, he said this was not the right time for the government to widen the tax net almost pervasively.
Mr. Ofosu-Dorte also considered some significant expenditure cuts in various sectors, especially the ministries that have already completed their budget presentations and have estimated capital expenditure must significantly cut off such expenditures and focus on the main areas to expend on.
Sharing his thoughts on the challenges that the Akuffo-led government is likely to face in the first 100 days into his tenure of office, he mentioned that, the potential spike in COVID-19 cases due to the reopening of schools, budget constraints and lastly, the politics surrounding the tight parliament and the Supreme Court case which challenges the election if there is a call for a re-run, are going to be the major hurdles for the President.
