AUSTRALIA – AFRICA INFRASTRUCTURE CONFERENCE 16TH – 17TH NOV, 2015

MELBOURNE

INVESTMENT OPPORTUNITIES IN THE TRANSPORT SECTOR OF GHANA

ByIng. E.N.K. ASHONG

OutlineCountry Background

Profile Of Transport Sector

Transport Sector Plans And

Programmes

Sector Financing

Challenges

Opportunities For Investors

Legal And Regulatory Environment

Conclusion

Country Background

• Ghana is West African Country with about 25m population, 238,540 km2 land size and divided into 10 regions

• The country is bordered by Togo, Ivory Coast, Burkina Faso and the sea(Gulf of Guinea)

• Governance by multi-party democracy with

a constitution that guarantees freedom and

liberties to all persons

• Ghana attained Lower Middle Income

Status in 2012

LOCATION OF GHANA WITHIN MAP OF WEST AFRICA

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Profile of transport sector

• Ghana transport sector is made of road, rail, water, maritime and aviation infrastructure• 95% of passenger and freight transport is by road

• The road network size is 71,063km made up of 60%feeder roads, 20%urban roads and 20%trunk roads

• Rail network of 947km, currently 133.6km representing 14.1% is operational• Ghana has one international airport and four regional airports• Two maritime ports, two fishing harbours and two dry docks

Transport

sector profile-

map

Ghana Airports Location

Tamale

KIA, AccraSunyani

KumasiA Policy to

develop airports

in all 10 regions

of Ghana

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EXISTING RAILWAY NETWORK (MAP)

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TRANSPORT SECTOR PROFILE

• The sector has a transport policy document which guides

its operations however the Policy oversight responsibility

for the Transport Sector is handled by 2 Ministries

MINISTRY OF TRANSPORT

Has oversight responsibility for all the modes of

transport, except road infrastructure.

MINISTRY OF ROADS & HIGHWAYS

The Ministry of Roads & Highways has oversight

responsibility for the development of road

infrastructure in Ghana

Transport sector profile

• Policy Objective;• a long-standing policy objective for the transport sector is ‘to establish an efficient,

modally complementary and integrated transportation network for the movement of people and goods at the least possible cost within the country, as well as to and from the country, both regionally and internationally.’

TRANSPORT SECTOR PLANS AND PROGRAMMES• the sector has developed a four year strategic plan 2014-2017 outlining its

programmes for the sector• The sector has programmes in institutional restructuring, Asset management,

rehabilitation, upgrading and bridges• The plan is also costed to show the projects that have secured funding and the others

that are not• Currently the sector’s plan has a funding gap of about 55% for the road sector• The sector is reaching out to investors and also assessing unsolicited proposals from

private parties to support the development of infrastructure

TRANSPORT SECTOR FINANCING• Road fund established by law for road maintenance• Consolidated fund for development projects and maintenance• Development Partners (loans &grants) for development projects and technical

assistance• Private parties – PPP for development projects• Internally generated funds

CHALLENGES

• Road network condition - funding for rehabilitation and maintenance• Expansion of major roads links

• Congestion in the urban areas -• Almost collapsed railway sector…only 14% of network is operational• KIA needs expansion• The country needs another international airport• Regional airports require expansion

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CHALLENGES

• Berth capacity at the Ports is a major physical constraint as it needs to be increased in order to cater for the regular increase in container traffic and reduce double handling of materials

• Depth limitation at the Ports. Current maximum depth is 11.50m is too small to accommodate the increasing size of the container vessels calling in from the sub-region.

• Enforcement of axle loading controls to prevent road damage and to sustain transit traffic to landlocked ECOWAS countries

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OPPORTUNITIES FOR INVESTMENTS

• The ports of Ghana are used by neighbouring countries for trade and transit and competes with the ports of neighbouring Togo and Ivory Coast.

• Transportation of good and services are by road across the country and to the neighbouring countries; the road transport network covers the entire country

• The Government is seeking for investors to revamp the railway sector through PPP• Government is seeking partnership from private parties to further develop road,

ports and aviation infrastructure through PPP

OPPORTUNITIES FOR INVESTMENTS

• CURRENT PRIVATE SECTOR PROJECTS• Road Projects

• Accra Kumasi dualisation• Accra Takoradi• Accra Tema motorway• Construction and management of toll booths

• Ports• Port expansion works at Tema

• Railways

• Master Plan Studies for development of entire railway network almost completed

• Rehabilitation of the Western Rail Line – US$1.2 billion(Feasibility Studies completed) Including Rolling Stock

• Rehabilitation of Sub-urban Rail Lines• Accra-Nsawam - US$ 120 million

• Takoradi-Kojokrom-Sekondi - US$ 165 million• Kumasi-Ejisu - US$ 100 million

• Rehabilitation of locomotives and rolling stock to improve operations - US$ 250 million

OPPORTUNITIES FOR INVESTMENTS

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• Railway• Packaging of the development of the Eastern rail line and the Boankra Inland Port on Build

Operate Transfer(BOT) basis• Feasibility studies for the development of Tram services in Accra metropolis• Feasibility studies and the reconstruction of the Central Lines• Feasibility studies for expansion and construction of the Rail Lines to Northern Ghana• Construction of Proposed ECOWAS rail line along the Coast from Nigeria to Cote D’Ivoire

OPPORTUNITIES FOR INVESTMENTS

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• Aviation sub sector• KIA Phase III Rehabilitation project

• Remodelling and expansion of KIA Terminal Building including installation of aero bridges. US$ 224 million

• Development of landside facilities at KIA to enhance commercial activities

• Rehabilitation of existing airstrips and Regional Airports including the upgrading of Tamale Airport as an alternate airport to KIA.

• Development of additional cargo handling facilities

• Development of new airports in Accra, Takoradi, Ho and Cape Coast

OPPORTUNITIES FOR INVESTMENTS

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OPPORTUNITIES FOR INVESTMENTS•Maritime sub sector:

•Boankra Inland Port• Estimated project cost is US$250M

•Upgrading and modernization of the Tema Shipyard into a modern and well equipped facility•Eastern Corridor Multi-Modal Transport for VLTC

• Estimated project cost is US$470m• Major upgrade and development of Ports infrastructure at Akosombo and Buipe or

Yapei to handle containers • Development of 18 ferry landing sites• Upgrading of 7 existing vessels and procurement of 8 new vessels and equipment • Promotion of local boat building industry

• PPP policy developed

• PPP law is being developed

• The transport policy

• A policy Objective - Create appropriate environment for private sector participation in the delivery of transport infrastructure

• Traditional sources of funding road infrastructure delivery are inadequate. Opportunities are available to partner the private sector through PPP arrangements

LEGAL AND REGULATORY ENVIRONMENT

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Tariff Exemption: 100% duty exemption for production equipment.

Investment law guarantees 100% transfer of profits, dividends, etc.

Membership of the Multilateral Investment Guarantee Agency [MIGA] of the World Bank.

Tax holidays: 3-10 years depending on sector; 10years for free zones with 8% corporate tax thereafter.

Endowed with natural resources and high literacy rate with friendly people, it is the investor’s dream.

More information at www.gipc.org or www.gfzb.com

LEGAL AND REGULATORY ENVIRONMENT

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•Government of Ghana sees the Private sector as partners for Economic development.

•Therefore I wish to use this opportunity to extend an open invitation to the investor community to explore opportunities for investments and cooperation in the Transport Sector

CONCLUSION

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THANK YOU

FOR YOUR ATTENTION

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