Ghana’s infrastructure and construction sector is undergoing significant transformation, driven by ambitious government initiatives, private sector participation, and a vision to position the country as a regional transport and economic hub.
Despite facing some economic headwinds, Ghana continues to make strides in developing its road networks, railways, ports, and energy infrastructure.
Road Infrastructure
Ghana has made substantial progress in expanding and improving its road network in recent years. The government has increased the country’s road network from 78,000 km to nearly 100,000 km
This expansion includes the construction of over 2,000 km of asphaltic overlay and the rehabilitation and maintenance of about 11,674 km of roads
Several major road projects have been completed or are underway: Interchanges: The government has completed the Tamale Interchange, Pokuase Interchange, and Tema Motorway Interchange. Additional interchanges, including the Obetsebi and Flower Pot interchanges, are currently under construction
Motorway Expansion: The Accra-Tema motorway expansion project is a key initiative linking Ghana’s major cities and regions.
This project aims to improve connectivity and reduce travel times between the capital and the industrial hub of Tema. Eastern Corridor Road: This project is part of the government’s efforts.
To further boost road infrastructure development, the government has launched the District Road Improvement Programme (DRIP-2024). This initiative aims to empower Metropolitan, Municipal, and District Assemblies (MMDAs) with the tools and resources needed to enhance road networks across the country
DRIP-2024 is expected to create approximately 4,480 direct jobs and provide extensive training in mechanical engineering, hydraulic systems, and electronic systems diagnosis
Railway Development
Ghana is making significant investments in modernizing and expanding its railway network. The country’s master plan for railway modernization includes several major projects: Western Railway Line: In August 2022, the South African-based Thelo DB consortium signed a $3.2 billion agreement with the government to develop and operate the Western Railway line
This project aims to facilitate efficient freight haulage and improve connectivity. Eastern Railway Line: This $2.2 billion build-operate-transfer project involves transforming the existing 1067-mm gauge rail corridor into a double-track electrified standard gauge rail line
The concession will last 30 years, including three years for construction and 27 years for operation. Tema-Mpakadan Railway: The government has completed the iconic Tema-Mpakadan railway, which is expected to boost trade and regional connectivity
Other Railway Projects: The government has also initiated or overseen the construction/rehabilitation of the Achimota-Nsawam, Accra-Tema, Kojokrom-Tarkwa, and Kojokrom-Manso railway lines
The Ghana Railway Development Authority oversees these developments, with plans to build a total of 3800 km of track between 2020 and 2035
Aviation Infrastructure
Ghana is investing heavily in its aviation infrastructure to position itself as a regional air transport hub:Airport Upgrades: The government has completed and commissioned the Prempeh International Airport and the Yakubu Tali International Airport in Tamale
Additionally, Phase 1 of the Sunyani Airport rehabilitation has been completed
These improvements in aviation infrastructure are expected to boost tourism, trade, and Ghana’s position as a regional transport hub.
Maritime and Port Infrastructure
To enhance its maritime connectivity and boost trade, Ghana is developing its port infrastructure through various projects:Keta Port Project: This project aims to provide a bulk, containerized, and oil- and gas-capable commercial cargo port. It will be developed in four phases, with an estimated cost of $600 million for the first phase
Expansion of Existing Ports: The government is working on expanding the Port of Tema and the Port of Takoradi
Inland Ports: Development of the proposed Boankra Inland Port and a port at Mpakadan is underway
Fishing Harbors: The government has constructed two major fishing harbors in Elmina and James Town in Accra
These port developments are crucial for Ghana’s ambitions to establish itself as the gateway to West Africa and a hub for trade.
Energy Infrastructure
To meet rising electricity demand and diversify its energy sources, Ghana is developing its energy infrastructure: Renewable Energy: The country has added 134.1 MW of renewable energy to its energy mix, increasing from 37.7 MW in 2016 to 171.8 MW
Ayitepa Wind Farm: This 225-MW onshore wind energy project in Greater Accra is currently in its procedural stage. Upon completion, it is expected to produce 700,000 MWh of electricity, power 150,000 households with clean energy, and offset 250,000 tonnes of CO2 emissions per year
Other Infrastructure Developments
Ghana’s infrastructure development extends beyond transport and energy sectors: Healthcare Facilities: The government has completed six abandoned “Euroget” health sector projects and three other stalled projects, including regional and district hospitals
Sea Defense Projects: Construction of sea defence projects to protect communities in Komenda, Ningo Prampram, Axim, Elmina Anomabo, and Keta
Agricultural Infrastructure: The government has constructed 80,000-metric-ton warehouses under the One District One Warehouse Initiative and about 400 out of the 560 small earth dams in the 5 northern regions
Sanitation Facilities: More than 800 sanitation facilities have been constructed, increasing the proportion of the population with access to toilet facilities from 33% in 2016 to 80.8%
Sports Facilities: The University of Ghana Stadium in Legon has been completed, and multi-sports facilities have been built at Borteyman for the African Games
Rural Connectivity: The rural telephony network has been extended, increasing from 78 sites in 2016 to 1008 sites
Challenges and Outlook
Despite these significant developments, Ghana’s construction sector faces some challenges. The sector witnessed a year-on-year contraction of 11.7% in the second quarter of 2023
High costs of building materials, inadequate funds, and the need for a skilled workforce are some of the headwinds facing the sector.
However, the outlook remains positive. The construction sector is forecast to bounce back to pre-crisis levels by the end of 2026
. Average annual growth for the sector is forecast at over 5% between 2024 and 2027, aided by public sector investment in transport infrastructure to enhance regional connectivity
.The government’s recognition of infrastructure development as a crucial driver of economic growth is evident in initiatives such as the Ghana Infrastructure Plan 2018-47. This plan aims to improve transport networks, expand housing options, and enhance public facilities nationwide
Financing and Investment
Ghana is leveraging various financing mechanisms to fund its infrastructure projects: Public-Private Partnerships (PPPs): The enactment of the PPP Act in 2020 has created a framework for private sector participation in infrastructure development
Ghana Infrastructure Investment Fund (GIIF): This permanent investment vehicle, established in 2015 with an initial equity of $345 million, encourages private sector investment in infrastructure projects
Foreign Direct Investment (FDI): The government is actively seeking FDI, particularly in the mining, oil, and gas sectors, to support infrastructure development
What are the key challenges facing Ghana’s infrastructure development currently
Based on the search results, some of the key challenges facing Ghana’s infrastructure development currently include:
- Fiscal constraints and economic headwinds: The construction sector is expected to contract by 3.0% in 2024 due to ongoing fiscal constraints and government spending cuts
- High costs of building materials: The sector faces headwinds from the high costs of construction materials
3.Inadequate funding: There is insufficient funding available for infrastructure projects
4. Skilled workforce shortage: The sector needs more skilled workers to meet its development goals
5. Climate risks: Infrastructure assets like power plants, substations, dams, and roads are exposed to climate risks such as drought and flooding, which can cause significant damage
Maintenance and asset management issues: There is insufficient maintenance funding for retrofitting, rehabilitation, and expansion of existing infrastructure. There’s also a lack of proactive, climate-informed asset management
Outdated design standards: Some infrastructure design standards are not suitable or relevant to the national context
Lack of integrated planning: There’s inadequate integration of climate risk assessments into sector planning, which can lock in climate risks due to the long lifespan of infrastructure assets
Quality of service issues: Despite increased access to infrastructure services, the quality of service remains low in some sectors. For example, in the water sector, high losses divert more than half of the water produced
Power sector challenges: Ghana faces pressing challenges in the power sector, including rapid demand growth, periodic hydrological shocks, and reliance on expensive oil-based generation
Regional connectivity gaps: While Ghana is maintaining its international road corridors, it lacks sufficient power and ICT connectivity with neighboring countries
To address these challenges, Ghana needs sustained investment, improved planning and asset management, climate-resilient infrastructure designs, and strategies to mobilize long-term credit and develop a skilled workforce for the sector
What measures are being taken to improve the maintenance funding for Ghana’s infrastructure
Based on the search results, several measures are being taken to improve maintenance funding for Ghana’s infrastructure:
Integrated planning: The government is working to integrate maintenance expenditure into project planning from the outset. As projects are developed, the cost of maintenance is projected over the infrastructure’s lifecycle, and a schedule of maintenance expenditure is planned and integrated into the analysis
Infrastructure asset management systems: Ghana is implementing asset management systems that include inventories of all assets, their conditions, and strategic, financial, and technical aspects of managing infrastructure across its lifecycle. This helps utilities better manage their operations and maintenance needs
Improved budget preparation: There are efforts to improve budget preparation through better data on infrastructure assets, scope, and cost of work to be completed. Forward-looking budget estimates are being used to improve planning for maintenance
The government is considering earmarking revenue for the management of assets in certain infrastructure sectors, subject to stringent conditions
User fees: There’s a push to ensure that user fees are adequate to cover routine maintenance, operation of infrastructure, and its eventual replacement, when combined with formal government subsidies
District Road Improvement Programme (DRIP-2024): This initiative aims to empower local authorities with equipment and training for road maintenance, potentially improving the allocation of resources for ongoing maintenance at the local level
Public-Private Partnerships (PPPs): Ghana is increasingly looking to the private sector to help close the infrastructure financing gap, which could include provisions for ongoing maintenance in PPP agreements
Ghana Infrastructure Plan (GIP): This long-term plan sets benchmarks for infrastructure development and may include provisions for sustainable maintenance funding
These measures aim to address the challenges of infrastructure maintenance funding by improving planning, budgeting, and resource allocation processes, as well as exploring alternative funding sources like user fees and private sector partnerships.
What new funding opportunities are available for Ghana’s infrastructure
Several new funding opportunities are available for Ghana’s infrastructure development:
New international funds: The roadmap for resilient infrastructure in Ghana highlights a total of 82 funds (worth approximately US$274 billion) with the potential to finance infrastructure in Ghana. Of these, 46 are new funding opportunities that can increase the range of options for infrastructure financing available to the Government of Ghana
Climate resilience and adaptation project funding: The Government of Ghana is inviting investors and financiers to partner in implementing prioritized climate resilience and adaptation projects
Private sector investment: The government is increasingly looking to the private sector to help close the infrastructure financing gap. This is facilitated by:
The Public-Private Partnerships (PPP) Act of 2020, which regulates contracts between government authorities and private entities for infrastructure development
The Ghana Infrastructure Investment Fund (GIIF), established to encourage private sector investment in infrastructure projects
International development bank funding: The African Development Bank (AfDB) has approved loans for infrastructure projects, such as a $23 million loan for a modern floating dock ship repair facility in the Port of Takoradi
Export credit agency facilities: Some projects are being funded through export credit agencies, such as the Swedish Export Credit Corporation’s loan for the Western Rail Line project
Commercial loans: International banks are providing commercial loans to support infrastructure projects, as seen in the Western Rail Line project financing
Foreign Direct Investment (FDI): The government is actively seeking to increase FDI towards infrastructure development, particularly in the mining, oil, and gas sectors
Sustainable Development Goals (SDG) related funding: To meet SDG targets, annual infrastructure investment needs to reach USD 9.3 billion by 2030, opening up opportunities for various funding sources
These new funding opportunities aim to diversify Ghana’s infrastructure financing sources, combining public, private, and international investments to support the country’s ambitious infrastructure development plans.
Conclusion
Ghana’s infrastructure and construction sector is on a trajectory of growth and transformation. Despite economic challenges, the country continues to invest in critical infrastructure across various sectors. The focus on road, rail, aviation, and maritime infrastructure positions Ghana to become a regional transport powerhouse and trade hub. The government’s commitment to infrastructure development, coupled with initiatives to attract private investment and leverage PPPs, bodes well for the sector’s future. As Ghana continues to implement its ambitious infrastructure plans, it is poised to enhance connectivity, boost economic growth, and improve the quality of life for its citizens. The success of these infrastructure initiatives will be crucial in realizing Ghana’s vision of becoming a gateway to West Africa and capitalizing on opportunities presented by the African Continental Free Trade Area. As the country navigates its economic challenges and continues to invest in infrastructure, the construction sector is set to play a pivotal role in Ghana’s development trajectory in the coming years.
By Derek Payne
Publishing Director
