Using Public-Private Partnerships (PPPs) to Address Ghana’s Infrastructure Challenges – It is Time for Action

The President, His Excellency President John Dramani Mahama, has pledged to spend up to $10 billion on infrastructure development. The big question, though, is where is the money going to come from? The two top factors perceived by Ghanaian contractors as hampering their performance are payment delays for government projects and poor access to credit (Ofori-Kuragu et al., 2014). Recent challenges to the Ghanaian economy have worsened the situation, with some contractors unpaid for projects up to 5 years after completion. The government is estimated to owe nearly $9 billion, including nearly $1.4 billion owed to contractors for completed work. With a heavy reliance on government-financed projects, this has caused significant cash flow problems for many contractors, with several being forced to cease operations because of poor cash flow. Several campaigns by contractor groups have not yielded the required results. Whilst arrangements have been made to pay some of the smaller debts owed to contractors, some of the contractors complain about unfavourable payment terms and conditions. This approach to project delivery and payments for completed schemes is not sustainable for most Ghanaian contractors who rely on commercial sources to prefinance government projects. The communique issued at the end of the 2025 National Economic Dialogue called for innovative action to address the Infrastructure deficit and to advance economic transformation.

The challenge
The Government, like previous administrations, faces significant challenges in developing critical infrastructure and the delivery of essential public services that restrict the growth of the Ghanaian economy. It is estimated that addressing Ghana‘s infrastructure deficit could require sustained spending of at least US$1.5 billion per annum for at least 10 years. The government’s inability to pay for these has hindered the development of critical infrastructure. With a high and accumulating overall national debt, borrowing to invest in infrastructure is no longer sustainable. There is an urgent need for innovative, sustainable approaches to financing infrastructure, especially large-scale infrastructure, to enable the development of complex and expensive infrastructure needed for economic transformation. Private finance provides opportunities to address the infrastructure deficit. It is for this reason that the government of Ghana is encouraging the use of Public-Private Partnerships (PPP) as a means of leveraging private sector resources and expertise to close the infrastructure gap and deliver efficient public infrastructure and services.

What are PPPs?
The World Bank defines PPP as a long-term contract between a private party and a government entity for providing a public asset or service, in which the private party bears significant risk and management responsibility. PPPs may be used for significant upgrades or renovations, as well as the management of a public asset and/or related public services. The private party bears significant risk and management responsibility throughout the life of the contract. Remuneration may be mainly linked to performance or the demand for the asset or service. There are two broad PPP typologies - PPPs whose revenues are based on user payments (user-pays PPPs, also known as “concessions”) and those whose revenues are based on public or budgetary payments (government-pays PPPs. Concessions are the most popular PPP.

Why PPPs?
Despite government efforts to promote public-private partnerships (PPPs) in Ghana, few projects have reached the implementation stage. The 2022 and 2023 editions of the Annual National Report on Public-Private Partnerships, for example, identify several potential strategic infrastructure projects that can be delivered using the PPP approach. These include both solicited and unsolicited projects, some of which have been on the books of the Ministry of Finance for several years without any tangible progress. Something about Ghana’s approach to PPPs is not working, and this needs to be addressed. Given the huge infrastructure gap, innovation and new thinking are needed to ensure greater interest from investors in PPPs.

Advantages of PPPs
Some of the main advantages of PPP are the opportunities they offer to leverage private capital to finance the construction and operation of public infrastructure, as well as delivering social and commercial benefits whilst freeing up public resources for alternative goals. This provides an opportunity to provide critical public infrastructure without adding to public debt by taking such expenditure off the government’s balance sheet. PPPs also promote innovation, usually championed by the private sector partners, as well as knowledge sharing between the collaborating partners and across different sectors. Again, PPPs allow governments to focus on other important core functions whilst leveraging private sector expertise to optimize public service performance. Also, the private partners involved in PPP projects are allowed to implement projects characterised by potentially high return on investment rates that would be otherwise impossible.

Conclusion
There is a broad consensus that PPPs offer the best way out of Ghana’s infrastructure crisis. At the recent Graphic Business/Stanbic Bank Breakfast Meeting, Mr Vish Ashiagbor, the Senior Country Partner of PwC, opined that Public-Private Partnerships (PPPs) represented a viable financing solution for Ghana's infrastructure and public services deficit. Former Works and Housing Minister, Kojo Oppong Nkrumah, supports this with a call for mainstreaming PPPs as the main approach to financing infrastructure. What is required is bold new thinking to implement innovative best practices to make PPPs work for Ghana. So much has been said! The time for action is now!

The author, Dr Joseph K. Ofori-Kuragu is an academic at Anglia Ruskin University, UK and a Director at Innovation Inc. The author may be reached at: [email protected]