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Ghana is the fifth country in Africa that has great opportunities for infrastructural investment, a recent report by PricewaterhouseCoopers (PwC) has identified.

According to the report, the country’s infrastructure and capital project financing totalled $590 million for the last 10 years and it is expected to rise by eight per cent every year and reach $12 billion in new financing for the next 10 years to 2025.

However, despite such opportunities, Ghana needs to develop skills set within the public sector, especially in designing projects and conducting rigorous feasibility studies to determine the actual viability of projects.

This practicability of projects is important to attracting financing in the delivery of infrastructure in the country, including social and commercial infrastructure, a gap the International Finance Corporation (IFC) and the Africa Infrastructure Country Diagnostic (AICD) Report 2010 have estimated would take the country about 10 years of sustained spending of at least $1.5 billion per annum to close.

In Ghana, the traditional ways of providing funds for infrastructural development through budgetary allocations, donor support and loans, have proved to be inadequate and unpredictable. This stems from Ghana’s attainment of a lower-middle income country recently.

In accordance, the Minister of Finance, Mr Seth Terkper said, “Given the limited budget resources, the country’s huge deficit in infrastructure cannot be met by the public sector alone through budget allocations.”

It was in its bid to address this challenge that government developed a National Policy on Public Private Partnership (PPP) in 2011 to leverage public and private sector resources and expertise to close the infrastructure gap.

PPP is a long-term contractual arrangement where government taps the financial, human and technical resources of the private sector for the delivery of infrastructure and services traditionally provided solely by government.

Mr Terkper said through PPPs it should be possible for cities, metropolitan and municipal authorities to assume the responsibility of implementing such infrastructural projects that could pay for themselves in their localities.

The World Bank has been supporting government since the Policy was adopted and to this end it is providing an amount of $30 million over a four-year period which began in 2012 and will end in 2016.

The aid is to build capacity at various levels so that a more comprehensive programme could be put in place to fully implement PPP projects from 2017 and beyond.

A Partner and Leader, Capital Projects and Infrastructure, PwC Africa, Mr Jonathan Cawood, who co-presented the report in Accra, said opportunities in Ghana’s infrastructure and capital projects space followed the global front.

“According to PwC’s recent Infrastructure Spend Review, portfolios will increase at an annual average of 10 per cent through to 2025, exceeding $180 billion per annum by the end of this period in sub-Saharan Africa,” he said.

Underlying the growth in expenditure will be transport, logistics, power and utilities. According to a Partner at PwC Ghana, Mr Vish Ashiagbor, social infrastructure such as schools and hospitals would also come in handy as part of infrastructure investments in Ghana.

While Ghana’s spending on infrastructure and capital projects was projected to grow at eight per cent a year for the next 10 years, growth in Nigeria and South Africa was expected to be 31 per cent and 37 per cent respectively.

Both speakers were unanimous that access to capital would not be an issue for any country. However, what a country needs in attracting investments is “good project preparation.”

“We don’t think there is a lack of finance, we think there is a tremendous amount of capital around looking for good projects. Mainly we think it’s due to projects not being part of a master plan or a pipeline of projects and insufficient project preparation,” Mr Cawood said.

He explained that feasibility and understanding demand and supply dynamics, levels of affordability and willingness to pay are all factors that impact the viability of a project.

The availability of skilled resources, which was identified as a pressing challenge in West Africa, including Ghana, contributed to project delays and cost overruns. The delays cause budget overruns in between 10 per cent and 50 per cent of such capital and infrastructure projects in West Africa.

In spite of that, the country still remains an attractive destination for infrastructure and capital projects investments, as stated by Mr Ashiagbor: “Ghana is still an attractive environment not only in Africa. Overall, if we are more forward-looking, Ghana has potential. The issue is to realise that potential and that takes action. It’s time we stopped talking and take action.”

Ghana would have to continuously build new, and improve existing infrastructure for accelerated development to maintain itself as an important gateway to the sub region.

Already, the country has an advanced infrastructure platform when compared with other  countries in Africa. A large share of Ghana’s road network is in good or fair condition and institutional reforms have been adopted in the ICT, ports, roads, and water supply sectors.

However, the most pressing challenges lie in the power sector, where outmoded transmission and distribution assets, rapid demand growth, and periodic hydrological shocks leave the country reliant on high-cost oil-based generation.

Exceptionally, high losses in water distribution leave little to reach end customers, who are thus exposed to intermittent supplies.

The country already spends about $1.2 billion per year on infrastructure, equivalent to about 7.5 percent of GDP. A further $1.1 billion is lost each year to inefficiencies, notably underpricing of power. Ghana’s annual infrastructure funding gap is about $0.4 billion per year, chiefly related to power and water.