Business News of Sunday, 4 September 2016
The Minister of Foreign Affairs, Madam Hanna Tetteh has stated that government will no longer provide guarantees under Public Private Partnership (PPP) projects.
According to her, the decision is due to pressure on the fiscal space to provide infrastructure projects to meet the demands of the nation.
Speaking at the launch of the UK-Ghana Chamber of Commerce, Madam Hanna Tetteh said that business owners who wish to partner government to undertake projects must develop plans without government guarantees.
“Given the fact that we are a lower middle income country; given the fact that we have a huge demand for infrastructure that we need to develop. There will be of course increased demand for public private partnership, but I must also add PPP without government guarantees,” she said.
She explained that providing guarantees reduces the fiscal gap that government has to expand infrastructure development in the country.
“Going forward that is going to be one of the changes, when we give guarantees, it of course shrinks the fiscal space that government has to engage other social investments,” she said. By this, Madam Tetteh stressed that government agencies will now be compelled to borrow on their own financial strength.
She stated that this will urge government agencies to build good financial balance sheets to qualify for loans.
“We are moving away from the point where you necessarily assume that once you get a procurement, and you’ve get the project and you say, can we get a government guarantee and then we go to parliament, it’s going to be a thing of the past,” she cautioned.
She stated that the move is also aimed at creating an enabling environment for the private sector o thrive and grow.