The World Bank has identified public-private partnerships (PPPs) as one of Ghana’s most important financing tools for addressing an estimated annual infrastructure funding gap of US$37.2 billion, warning that rapid urbanisation is placing increasing pressure on transport, housing, water, sanitation and energy infrastructure.
According to the World Bank’s Ghana Sustainable Cities Strategy report, the country must significantly increase infrastructure investment over the coming decades to keep pace with urban population growth and support sustainable economic development.
The report notes that Ghana has so far implemented 13 PPP projects with a combined investment value of US$2.75 billion, while another 21 projects valued at US$21.35 billion are currently in the pipeline.
It said approximately 94.4 percent of the proposed investment pipeline is concentrated in rail transport, urban mobility and water supply, sectors considered critical to supporting the country’s expanding cities.
Beyond expanding PPPs, the report recommends strengthening municipal finance through improved property taxation, land value capture mechanisms and enhanced local revenue mobilisation.
It also calls for reforms to urban planning and land administration to ensure infrastructure development keeps pace with future urban expansion.
According to the report, sustainable urban development will require stronger coordination between national and local governments, increased private sector participation, innovative financing mechanisms and more effective planning.
The World Bank observed that although urbanisation has contributed significantly to economic growth, employment creation and improved living standards, infrastructure investment has not kept pace with the rapid expansion of Ghana’s cities.
Ghana’s urban population has grown from fewer than four million people in 1990 to about 17.5 million in 2021, representing 57 percent of the national population.
The report projects that nearly 70 percent of Ghanaians will live in urban areas by 2050, with cities expected to accommodate an additional 12 million residents over the next 25 years.
To meet the demands of this urban growth, Ghana will require an estimated US$37.2 billion in infrastructure investment every year.
However, current public investment levels remain well below what is required.
Between 2010 and 2020, government capital expenditure averaged 6.8 percent of total expenditure, equivalent to just 1.24 percent of gross domestic product (GDP).
Overall infrastructure investment averaged five per cent of GDP during the same period, slightly below the 5.4 percent average recorded by lower-middle-income countries.
The report also revealed that infrastructure sectors accounted for only 12 percent of planned public capital expenditure in the 2023 national budget, while more than 68 percent was allocated to social sectors.
According to the World Bank, the persistent infrastructure investment gap has contributed to worsening traffic congestion, inadequate housing, poor sanitation, overstretched transport systems and limited access to essential urban services.
The report further noted that Ghana’s urban footprint is expanding by approximately 3.2 percent annually, while population density remains relatively low compared with many African cities.
This pattern of urban sprawl, it said, significantly increases the cost of providing roads, water systems, electricity and other public infrastructure.
It explained that extending infrastructure to informal settlements is considerably more expensive than servicing planned communities.
According to the report, retrofitting roads, drainage systems, water supply and sewerage infrastructure in informal settlements can cost between two and eight times more than providing the same infrastructure in well-planned neighbourhoods.
The World Bank therefore stressed that proactive urban planning, stronger municipal financing and greater private sector investment would be essential to reducing infrastructure costs and building more sustainable, resilient and productive cities.
