Allowing a degree of independence when investment institutions decide on investments with commercial principles, is “a model that other African countries may want to consider replicating”, Ghana Infrastructure Investment Fund (GIIF) CEO Solomon Asamoah urged on November 17.
He said this model could be beneficial in attracting further investment into African infrastructure, but noted that governments and the private sector continued to have diverse views on risk and the policy environment.
In a panel discussion during this year’s virtual Africa Mining Forum, Asamoah pointed out that Africa needed about $100-billion a year over ten years, to start addressing its infrastructure deficit.
The GIIF was established to help the Ghanaian government unlock more investment in infrastructure from private sector resources and was formed when the government put aside $325-million of its own resources to establish the investment vehicle.
What makes it unique, is that there is no government official on the board and investment decisions are made based on the merits of a project.
Given that it is government money being spent, there is government oversight in the form of an advisory committee chaired by the Ghanaian Finance Minister.
“We think that we have the best of both worlds in having a vehicle that has government commitment and ownership,” Asamoah said, noting that, over four years, the GIIF has approved and advanced 12 infrastructure projects across various sectors in Ghana.
Institutions like the GIIF are critical in overcoming the mistrust between the private sector and government, he added, noting that “people need to be able to see things from both parties’ perspective so that the structure you put in place is a win-win situation”.
These institutions also help in “demystifying” some uncertainties that cause people to oppose projects and transactions.
“It’s a very useful intermediary role that we can play if we build up our capacity along with [banking and financial institutions], then you can see that even more financing and understanding will likely take place,” Asamoah commented.