16 July 2013

Ghana: Law On Private-Public Partnership in the Offing

press release

Government has reaffirmed its commitment to the use of Private-Public Partnership (PPP) as an appropriate strategy for financing public infrastructural development for the accelerated economic development of the country.

PPP is a contractual arrangement between a public sector entity and a private entity for the delivery of public services, with a significant transfer of risk to the private sector over a period of time.

PPP enables government to provide better infrastructure and services through the use of private sector financial, human and technical resources, thereby freeing government resources for other equally important uses.

To that effect, government, with support from its development partners, has drafted a legal framework to govern the operations of PPP in Ghana, while an appropriate system for capacity building has also been designed by government, with the support of the World Bank, British Department for International Development (DfID) and several other development partners to assist in ensuring that the capacity of relevant bodies for the adoption of PPP are well resourced to ensure its success.

The framework comprises the objectives, scope, application, principles, institutional framework, project identification and preparation processes, solicitation, agreements, complaints, settlements of disputes and transitional procedures for PPPs in the country.

With the enactment of the law, hopefully, later, this year, it is expected that a complementary set of documentation on regulations and guidelines as well as sector-specific entities would also be developed for the effective implementation of the law.

The Minister for Finance and Economic Planning, Mr Seth Terkper, made these known in an address delivered on his behalf at a Stakeholder Consultation Forum on the Draft PPP Law in Accra, yesterday.

The Stakeholder Consultation Forum was organised by the Public Investment Division (PID) of the Ministry of Finance and Economic Planning.

Mr Terkper noted that over the years, government had been grappling with the provision of timely, adequate, and reliable infrastructure and services to facilitate the economic development of the country.

He said it had been established that US1 billion was required annually over the next decade if Ghana was to make up for the country's infrastructural deficit.

He said this amount of money could not be met from budgetary resources alone, hence the need to identify other sources of funding as well as adopt other strategies that would encourage the private sector to be effectively engaged to adopt the PPP initiative.

In his remarks, Mr Paul Victor Obeng, Chairman of the National Development Planning Commission and Senior Presidential Adviser, said the essence of the PPP Law, rather than being a strategy to offload the financial burden on government, was to empower the private sector to play its play their appropriate role in the socio-economic development process of the country.

Mr Obeng said, Ghana had attained a new status of a lower-middle income economy which required a certain level of infrastructural stock to drive the economy further to a higher level, and that the philosophy underpinning the PPP Law was to make the private sector the engine of economic growth and take private-public partnership to another level and to ensure policy stability.

In a presentation on the PPP Law, Mr David Ofosu-Dorte, Executive Chairman of AB & David, a Law Firm for Business and Projects in Africa and Consultant to the PPP initiative, said the drafting of the law was necessitated by the multiplicity of Memoranda of Understanding (MoUs) guiding a number of many private-public partnership initiatives and the unco-ordinated manner in which such initiatives were implemented.

In her closing remarks, Ms Magdalene Appenteng, Director, PID, disclosed that the PID was preparing the various guidelines to complement the law when it was promulgated by Parliament.

In addition, Ms Appenteng said the establishment of the Project Implementation Fund was underway while standardized agreements and processes were also being put in place to facilitate the effective implementation of the law, when passed.

Source: ISD

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