We must strengthen our financial institutions to fund infrastructure development – Seth Terkper

Former Finance Minister and Economic Adviser to the President, Seth Terkper, has emphasized the need to bolster Ghana's development finance institutions in order to fuel infrastructure development and drive the nation's economic transformation. During the official opening of the Global Leadership, Innovation and Development Academy (GLIDA) in Accra on October 16th, Terkper stressed the importance of building upon existing institutions while simultaneously creating effective borrowing and debt repayment systems to fund development projects.

He highlighted Ghana's National Investment Bank (NIB), pointing out that it had been established earlier than the China Development Bank, showcasing the country's proactive approach to establishing institutions that would support economic growth. Terkper urged the current generation to reinforce these institutions to ensure their continued effectiveness.

An example of the role that development finance institutions can play in supporting national development was cited by Terkper in the financing of infrastructure by China Development Bank. As Ghana moved into middle-income territory, it necessitated a shift towards domestic funding sources and alternative financing arrangements, as access to external financial support, such as grants and concessional loans, was reduced.

This, according to Terkper, underscored the necessity of strengthening Ghana's domestic markets to fund its capital expenditure.

Moreover, Terkper cautioned that many developing nations had entered international sovereign bond markets without proper preparation, emphasizing the significance of sound borrowing arrangements backed by clear repayment mechanisms. He stressed that Ghana must prepare its institutions to cope with the demands of further economic advancement, including the potential attainment of upper-middle-income status.

Lastly, Terkper called for Ghana to learn from emerging economies and forge partnerships that would help convert its middle-income classification into tangible development outcomes.