Former Finance Minister and Economic Adviser to the President, John Mahama, Seth Terkper, has called for stronger development finance institutions to support the country’s infrastructure needs and economic transformation.
Speaking during the official launch of Global Leadership, Innovation and Development Academy (GLIDA) in Accra on Friday, 16 October, Mr Terkper said Ghana must build on its existing institutions while establishing effective borrowing and debt repayment mechanisms to finance development.
He pointed to the National Investment Bank (NIB), noting that its establishment before the China Development Bank demonstrated the foresight behind Ghana’s early efforts to build institutions capable of supporting economic growth.
“Our own National Investment Bank is older than China Development Bank,” he said.
“It is our responsibility as a current generation to strengthen these institutions.”
Mr Terkper cited the China Development Bank’s financing of infrastructure as an example of the role development finance institutions could play in supporting national development.
He argued that strengthening such institutions had become particularly important as Ghana’s middle-income status brought changes to its access to external financial support.
According to him, reduced access to grants and concessional financing required the country to strengthen domestic funding sources and explore alternative financing arrangements for its capital expenditure.
“We had to strengthen our domestic markets to finance our capital budget in particular,” he stated.
Mr Terkper also cautioned that many developing countries had entered international sovereign bond markets without adequate preparation, highlighting the importance of sound borrowing arrangements backed by clear repayment mechanisms.
He said Ghana needed to prepare its institutions for the demands of further economic advancement, including the possibility of attaining upper-middle-income status.
He further urged the country to draw lessons from emerging economies and pursue partnerships that would help translate its middle-income classification into meaningful development.