Extractive revenue volatility threatens GH₵30bn expressway dream; contingency measures needed – CIPAC
According to CIPAC, the concern is about ensuring that the financing arrangements for such a long-term investment remain robust when the economic assumptions supporting them change.
The Chartered Institute of Project Analysts and Consultants (CIPAC) has warned that Ghana's ambitious GH₵30 billion Big Push programme, specifically the Accra–Kumasi Expressway, is at risk due to volatility in revenues from the extractive sector. CIPAC Fellow Amo Agyapong emphasized that while the expressway is vital for economic growth, the financial stability of such a long-term investment hinges on the resilience of financing arrangements.
Extractive revenues, including gold and petroleum, form a significant portion of Ghana's economy and government income, but they are inherently unpredictable, subject to fluctuations in global commodity prices and exchange rates. These uncertainties could lead to revenue shortfalls, potentially delaying construction, increasing costs, or forcing reallocation of funds from other priorities.
To mitigate this risk, CIPAC proposed setting aside a contingency reserve that would be tapped during revenue downturns, rather than solely relying on baseline projections. This reserve should be strictly managed, with defined triggers, reporting, and oversight to ensure it serves its purpose without enabling uncontrolled spending.
CIPAC also stressed the importance of realistic revenue assumptions in budgeting, rigorous project management practices, and transparent procurement processes. The institute urged for a counter-cyclical fiscal approach, where infrastructure investments are maintained throughout commodity price cycles to ensure long-term economic benefits.
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