In addressing the country’s major infrastructure deficit, which is estimated at about US$30 billion; government has reached a barter agreement with Sinohydro Group Limited of China, to provide US$2 billion of infrastructure, Finance Minister, Ken Ofori-Atta has said.
Presenting updates on key policy initiatives, at the mid-year budget review in parliament, Ofori-Atta explained that the infrastructures include roads, bridges, interchanges, hospitals, housing and rural electrification, in exchange for Ghana’s refined bauxite.
“To bridge this gap [infrastructure gap], government proposes a new model of financing Ghana’s infrastructure requirement, through leveraging our natural resources.”
“Through this financial arrangement, we will be able to pursue our infrastructure agenda through 2019 to 2020 without increasing our deficit or ruining the economy,” Ofori-Atta stated.
In line with this, a bauxite refinery will be established within the next three years in collaboration with selected private partners including at least 30 percent local participation.
Furthermore, the arrangement will involve a moratorium period of three years to give Ghana the time to establish an aluminium refinery. After the moratorium period, the country will fulfil its part of the barter agreement over another 12-year period.
The first phase of the project, which is expected to start in September 2018, will include road projects across the 10 regions of the country. These include the 51 km Nyinahene – Awisesu (Bauxite Road) and 16.5 km Nyinahene – Kyekyewere (Bauxite Road), all in the Ashanti Region, among many others.
In a related initiative, the Finance Minister stated that through competitive bidding, the Ministry of Railways Development has reached the final stages of procuring a strategic investor for the development of the Eastern Railway Line, from Accra-Tema to Kumasi on a Build, Operate and Transfer (BOT) basis with Ghanaian participation.
Out of 14 consortiums shortlisted, the preferred bidder will be chosen by the end of the year for work to begin next year.
The Accra to Ouagadogou rail network, another BOT project, has 11 entities shortlisted, with the procurement process scheduled to be completed this year for construction to commence in the first quarter of next year.
This line will serve the Eastern part of the country, which will go through Ho, Hohoe, Yendi, Tamale, Bolgatanga and Paga.
The government’s approach is to build an integrated infrastructural network, to facilitate industrialisation, trade and urbanization across the country.
To this end, Ofori-Atta noted that, government has started discussions with real estate developers to build homes along the 95km Tema to Mpakadan rail line.
By Joshua W. Amlanu