Africa Must Build Capacity To Finance Development – Seth Terkper

Seth Terkper

The Presidential Advisor on the Economy, Seth Terkper, has called on African countries to strengthen their capacity to finance the development of the continent as declining access to grants places greater responsibility on the private sector to support economic growth.

Delivering the keynote address at the 8th edition of the Chamber of Commerce and Industry France-Ghana (CCIFG) Gala Dinner and Awards, Mr. Terkper, said Africa was no longer made up of predominantly low-income countries, as a significant number had attained lower- and upper-middle-income status.

He said Africa’s changing economic classification meant that many countries were increasingly losing access to grants and concessional financing, requiring businesses and domestic financial institutions to assume a greater role in supporting development.

This, he said, therefore, required businessmen to step in and ‘shoulder’ part of the responsibility for development citing the example of the Akosombo Dam as a major development project financed through a 40-year concessional loan, with a 10-year moratorium and 30 years for repayment.

“What this means, therefore, is that our businessmen in particular have to step in to shoulder part of the responsibility for development. What is the result of becoming a lower middle income country and an upper middle income country? The first is you lose grants and the second is that you lose concessional financing,” he stated.

He said similar development projects were now being financed under shorter terms, with some World Bank-associated projects having a maximum repayment period of 25 years and a five-year moratorium attributing the situation partly to the loss of concessional financing, which had compelled several African countries to turn to international financial markets without adequate preparation.

The former Finance Minister said the situation made it necessary for chambers of commerce and business organisations to support a transformation in Africa’s approach to economic development while urging African countries to draw lessons from emerging economies that had successfully moved from exporting raw materials to producing value-added goods.

Mr. Terkper, however, stressed that the call for greater domestic financing does not mean African countries should reject support from international partners but said African countries should rather develop stronger domestic financing mechanisms while maintaining strategic partnerships with advanced economies and international financial institutions.

Highlighting the importance of Ghana-France economic relations, he said the partnership provided opportunities for trade, investment, technology transfer and access to international markets while commending CCIFG’s role in facilitating commercial relationships, business partnerships and the exchange of expertise between the two countries.

Also present at the 8th Chamber of Commerce and Industry France-Ghana (CCIFG) Gala Dinner and Awards Night include France Ambassador to Ghana, Diarra Dimé-Labille, President of CCI France Ghana (CCIFG), Guillaume Valence, Board of Directors, business leaders and several other dignitaries.

By Ebenezer K. Amponsah

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