Public-Private Partnerships (PPPs) represent a viable financing solution for Ghana's infrastructure and public services deficit, the Senior Country Partner of PwC Ghana, Vish Ashiagbor, has said.

Drawing from PwC's global experience in studying PPP projects worldwide, including direct work with Ghana's Ministry of Finance, Mr Ashiagbor emphasised that while PPPs were not a simple solution, they offered significant economic benefits when properly executed.

Speaking at the Graphic Business/Stanbic Bank Breakfast Meeting in Accra, Mr Ashiagbor highlighted the importance of understanding sustainable development through the lens of the former United Nations Secretary-General's definition, which emphasised that project costs should not become liabilities for future generations.

The discussion of sustainable development and PPPs in Ghana has evolved significantly since 2008, with a major milestone being the passage of the PPP Act in 2020.

The legislation finally provided a clear legal framework for defining and implementing PPP projects in the country.

This approach requires both public and private sectors to make long-term investments in infrastructure and social systems.

The sectors crucial for development using the PPP model, Mr Ashiagbor said, included energy, industry, transportation, information and communications technology (ICT), water and sanitation, health, education and housing. 

Financial challenges

The Senior Country Partner of PwC said Ghana's current financial challenges, including budget deficits and limited access to capital markets, made PPPs particularly relevant.

Participants

Traditional government financing methods include domestic resources, grants, commercial debt, private sector investment, development finance institutions (DFIs) and green financing.

Under the PPP Act, these partnerships are defined as contractual arrangements between government authorities and private parties for providing public infrastructure or services traditionally handled by the public sector.

The private partner assumes defined risks over a significant period while performing infrastructure or service delivery functions.

The objects of the Act are to, among others, regulate PPP arrangements and promote the use of private sector resources for the provision of infrastructure and services through PPPs.

It is to create an environment and framework to enable private parties to participate in partnership projects and offer value for money to the public sector and users of the partnership projects.

The World Bank's definition adds that remuneration in PPPs must be linked to performance, emphasising the importance of accountability in these arrangements. This applies to both infrastructure and service-related PPPs.

Types

Mr Ashiagbor noted that PPP arrangements existed on a spectrum, ranging from simple service contracts to full privatisation.

He said management contracts, leases, concessions and build-operate-transfer (BOT) arrangements fell within the spectrum, with risk levels increasing as private sector involvement deepened.

The Senior Country Partner of PWC said the business case for PPPs in Ghana's sustainable development context was strengthened by the country's significant infrastructure and public service demands, in the face of financial constraints.

He said PPPs offered not just financing but also efficiency and innovation benefits.

“Value for money is a crucial consideration in PPP projects, meaning that the government's total expenditure, adjusted for transferred risks, should be less than if the government had performed the services itself”.

“Project specifications in PPPs focus on service delivery outcomes rather than just asset construction,” Mr Ashiagbor stated.

He said risk sharing was also a fundamental aspect of PPPs, with various types of risks distributed between public and private partners based on their ability to manage them effectively.

Govt commitment

Mr Ashiagbor said the government’s commitment and support were crucial for PPP success, whether through financing, regulatory support or efficient administrative processes.

He said debt guarantees often played a role in PPP financing arrangements, particularly when commercial lenders were involved in the consortium.

“The framework for PPPs in Ghana has evolved significantly, with the PPP Act providing clearer guidelines for implementation”.

“PPPs must be carefully structured to ensure they contribute to sustainable development goals while maintaining financial viability,” he stated.

Mr Ashiagbor said the success of PPP projects depended on both partners fulfilling their commitments and responsibilities effectively.

He added that regular monitoring and evaluation of PPP projects were also essential to ensure they met their intended objectives and provided value for money.