Business News of Thursday, 12 February 2015
The newly inaugurated Ghana Infrastructure and Investment Board (GIIB) is not the panacea to Government’s sinking infrastructure development.
If anything, it is more a “borrowing vehicle” that will worsen Ghana’s financial crisis, Minority spokesperson on Finance Anthony Akoto Osei told Joy News’ Evans Mensah.
His comments come hours after the GIIB was inaugurated by President John Dramani Mahama at the Flagstaff House, Wednesday.
The Ato Ahwoi-chaired Board has been tasked with the responsibility to mobilise and invest funds for infrastructural development in the country.
The Board chair,shortly after the inauguration, set an immediate target of working to resolve the country’s crippling power crisis.
Ato Ahwoi said: “We will work hard, so hard that you will not have any regrets reposing your trust in us to undertake this assignment.
“Ours is a difficult task…we have to mobilise funds; we have to help in selecting the projects and invest the funds so that we can see to the rapid development of this country.”
However the Minority Spokesperson on Finance was not quite as optimistic about the potential of the new Board to solve Ghana’s infrastructural deficits as Ato Ahwoi was.
He questioned the source of funding for the Board saying for a country that is already wallowing in debts, a new borrowing machine is not the way to go.
According to him, Ghana is highly indebted and poor with major state institutions like ECG, VRA heavily indebted.
He said the country pays in excess of 11 billion cedis annually on just the interest on loans, a situation that is not sustainable.
“We can’t borrow our way to development,” he pointed out, adding Ghana has borrowed enough and yet has no priority on its development projects.
Anthony Akoto Osei said for an economy that grew at 3.9 per cent it must “begin to prioritise its scarce resources.”
Finance Minister Seth Terkper vehemently disagreed with the sentiments of the Minority spokesperson on Finance.
He said the Infrastructure and Investment Board has a solid funding mechanism and would soon transform the country’s infrastructure agenda.
He said there will be 25 percent funding taken annually from the Petroleum Revenue Management fund which will be put aside as seed money for the Infrastructure and Investment Board.
Also there is the 2.5 percent Value Added Tax which has also been dedicated solely for infrastructure development, he mentioned.
He said the projects to which these funds will be committed to will be self-financing and would not cause further strain on the country’s debt profile.