Vice President Mahamudu Bawumia has challenged stakeholders in the road infrastructure provision system to critically evaluate the current financing models for financing road construction and explore ways to bridge the huge financing gap.
Speaking at the Ghana Highway Authority’s High Level Panel Discussion on the Financing Gap on Road Development in Accra on Wednesday, 7th August, 2024 Dr Bawumia noted that road transport is far and away the most commonly used means of transporting goods and persons in Ghana, thus the need to find sustainable financing to maintain the over 94,000 km network of roads.
“According to recent estimates, our nation requires 12 billion Dollars to clear the maintenance backlog and enable the network of about 94,203km to be at an optimal level. However, current funding levels only cover about 38% of this requirement, leaving a significant shortfall. This gap translates into deteriorating road conditions, increased maintenance costs, and missed economic opportunities.
“Globally, the situation is similar. The African Development Bank reports a continental infrastructure financing gap of between $68 billion and $108 billion annually. This staggering figure underscores the importance of innovative solutions and strategic partnerships,” he emphasized
Pointing out that Public-Private Partnerships offer a viable solution to bridge the financing gap, Vice President Bawumia noted that such arrangements has several potentials.
“By fostering collaboration between the public sector and private investors, we can unlock new funding streams and leverage expertise in project implementation. Successful PPPs have been implemented worldwide, demonstrating their potential to deliver infrastructure projects on time and within budget.
“To foster successful partnerships, it is essential to build strong relationships with construction firms, engineering companies, and technology innovators who can provide both financial support and valuable expertise. Public-private partnerships (PPPs) are vital for sharing the responsibilities and rewards of infrastructure development. Such collaborations often lead to improved quality of infrastructure and can significantly reduce the burden on public finances, allowing for the reinvestment of savings into other essential areas,” he maintained.
Challenging the participants to explore innovative financing models such as the issuance of Infrastructure and Municipal bonds, and reforming the tolling system to ensure equity in its payment, Vice President Bawumia stressed the importance of generating sustainable revenue streams for road development and maintenance.
“It is evident that we need to discuss a major paradigm shift in road financing at this technical forum. Some areas you might consider include Concessioning of high-volume roads over a period. This could be done on major trunk roads like Accra-Kumasi, Accra-Cape Coast, Accra-Akosombo as well new ring roads/ expressways around our major urban centres.
“Congestion pricing which aims to reduce the entry of low-capacity vehicles into central business districts and encourage the use of high-occupancy vehicles is also another option.”
Discussing what he termed a possibly controversial initiative, Dr Bawumia stated: “I wish to propose a radical reform of the road tolling system in use. It appears we are tolling the poor and leaving the rich and affluent to enjoy. Persons who live in places such as East Legon, Cantonments, Ridge and Labone don’t pay any tolls, but they have some of the best roads in Ghana. Meanwhile people living in Kasoa, those who ply the motorway daily and others who pay tolls do not have these quality roads. I propose a major reform of the system, maybe a toll on a good all drivers and passengers use irrespective of where they live, to address the concerns about equity and affordability.”
Dr Bawumia called for “realistic, frank and practical solutions,” noting that “Closing the financing gap in road development is not a task we can achieve alone. It requires collaboration, innovation, and a shared commitment to sustainable development. By embracing these principles, I am confident that we can build a road network that supports our economic ambitions and enhances the quality of life for our citizens.
“Our government stands ready to lead this effort in working with all stakeholders to transform our infrastructure landscape. Together, we can pave the way for a brighter, more connected future” he declared.
Also joining the call to find ways to bridge the financing gap the Minister for Roads and Highways, Hon Francis Asenso-Boakye disclosed that at the end of 2023, 44% of Ghana’s road network was classified as Good, 34% as Fair and 22% as Poor, as against the original target of 70% Good, 20% Fair and not more than 10% in poor condition by the end of 2025.
“Obviously, it quite evident that from where we are now, it will be quite an arduous task to be able to achieve the target,” he bemoaned.
Despite the many challenges, this government, the Minister disclosed, had added an impressive 12,830 kilometers of roads to our national network between 2017 and 2023, nearly triple the 4,636 kilometers added by the previous administration.