Home Headlines Controversy Surrounds Ghana’s Projects Funding Strategy

Controversy Surrounds Ghana’s Projects Funding Strategy

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Ghana S Infrastructure Investment Fund Giif
Ghana S Infrastructure Investment Fund Giif

In a move raising significant concern, Ghana’s Infrastructure Investment Fund (GIIF) has been scrutinized for using Special Purpose Vehicles (SPVs) to manage infrastructure projects.

Critics, including the Public Interest and Accountability Committee (PIAC), argue that this approach could sidestep established financial regulations and add unnecessary bureaucratic layers.

Background

The GIIF, responsible for large-scale infrastructure investments in Ghana, has successfully overseen significant projects like Terminal 3 at Kotoka International Airport and the Maha Beach Resort. These projects were directly managed by GIIF, highlighting its capability to handle substantial investments without intermediaries.

The Controversy

The Ministry of Finance recently allocated $108.7 million for the Accra-Tema Motorway Expansion Project. Instead of channeling these funds directly to GIIF, the money was placed in a “Gap Viability Fund” account at the Bank of Ghana. This account is intended to temporarily hold the funds until the GIIF’s SPV receives parliamentary approval.

PIAC asserts that, according to the Petroleum Revenue Management Act (PRMA), funds should be transferred directly to GIIF. The Act does not recognize SPVs, leading to concerns that bypassing GIIF could violate financial guidelines. PIAC recommends routing all funds to GIIF first, ensuring proper oversight and accountability.

Legal and Operational Concerns

Transferring funds directly to SPVs instead of GIIF is a potential breach of legal and operational protocols. Each SPV, having its board and management, can create additional bureaucratic layers, increasing operational costs and complicating financial reporting.

GIIF officials justify using SPVs, citing the need for specialized management of complex projects like the Accra-Tema Motorway, which involves ongoing tolling and maintenance. They argue that SPVs allow GIIF to focus on other high-impact projects.

Case Studies and Recommendations

GIIF’s successful management of Terminal 3 and the Maha Beach Resort without SPVs demonstrates its capability to handle large-scale projects efficiently. Critics question why similar approaches are not employed for the Accra-Tema Motorway.

To ensure transparency and accountability, PIAC recommends adhering strictly to the PRMA by transferring funds to GIIF first before allocation to SPVs. They emphasize the importance of maintaining clear reporting structures and evaluating the necessity of SPVs on a case-by-case basis.

The debate over GIIF’s funding strategy for the Accra-Tema Motorway project underscores the need for transparency and strict adherence to financial regulations. Ensuring proper oversight and accountability is crucial for maintaining the integrity of Ghana’s infrastructure investments.

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