Investments in Ghana’s infrastructure development in recent years make the country stand out as a regional hub for transport and infrastructure development, Fitch Solutions says.
With key focus on developments in the ports and railway sub-sectors, Ghana, Nigeria and Tanzania lead in infrastructure projects, either still under construction or completed.
Particularly, in Ghana, the dominance of already existing colonial-era railways although weakened, continue to provide huge opportunities for high-value brownfield sites. Nonetheless, this follows the completion of capital-intensive projects at the port.
Spotlight on the Railway Sub-sector
Currently, two rail projects worth a combined US$2.8 billion are under construction in Ghana. These two projects are contracted based on a Public-Private Partnership agreement (PPP) involving German and Indian companies.
According to Fitch Solutions, this partnership indicates foreign investor confidence in the country’s potential as the gateway to West Africa.
Furthermore, Ghana’s planned high-speed rail project from Accra-Kumasi makes up 20 percent share of SSAs high-speed rail projects. Considerably, the project is the highest value rail project in SSAs transport project line, Fitch Solutions asserts.
To this effect, South African Company Limited Transnet, signed a rail revitalization agreement with Ghana Railway Company Limited and Ghana Railway Development Authority in 2019 for the restoration of the Western Railway line in Ghana.
With work set to commence in March 2020, the onset of the pandemic last year hit Ghana’s railway subsector. Thus, this led to the halt or postponement of ongoing rail constructions.
This notwithstanding, the country is still struggling, like other African countries in running a more robust railway sector. And in the context of the African Continental Free Trade Area more investments in infrastructure projects can be extremely beneficial to the country.
The creation of the AfCFTA aims at ensuring that in the long term, efforts are made towards networking other parts of Africa with Ghana. This is in terms of railway lines and other platforms (road networks and communication infrastructure) to scale up trading activities.
Other transport infrastructure development
With regards to the ports sub-sector in SSA, Fitch notes that ports expansion in SSA accounts for 52 percent. While the construction of new ports accounts for 44 percent of SSA’s port infrastructure pipeline.
Accordingly, Fitch indicates that Nigeria leads with a USD 26 billion pipeline consisting of 16 port projects. On the other hand, Ghana has two commercial ports and has over the years engaged in projects to expand these ports.
Fitch notes that, as investments in transport infrastructure accelerate post-covid 19, road projects within countries will largely improve. For SSA in general, the number of such projects that are either under construction or completed is 858 projects. And these projects involve investments worth US$62 billion.
Fitch argues that these kinds of infrastructure projects are the most capital-intensive. Therefore, they account for over 50% of the project pipeline in terms of value in SSA.
With respect to road projects, Ethiopia leads SSA with 231 road infrastructure projects, followed by Nigeria with 105 individual projects. Likewise, Kenya, Tanzania and Uganda make up SSA’s top five road projects.
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