New public investment policy unveiled
A new policy to guide the management of public investments with the aim of improving the quality and delivery of public projects has been launched by the Ministry of Finance.
Known as the Public Investment Management (PIM) Policy, it is expected to identify key stakeholders and their roles and responsibilities in the delivery of public investment; establish a Project Development Facility (PDF) to facilitate project preparation, appraisal and all other preparatory works required in project development.
The policy was launched together with the Public Investment Management System (PIMS), an implementation guide designed to integrate with other government systems to ensure a robust and integrated system in the processing and delivery of public projects.
Both systems are ultimately expected to ensure prudent spending of resources.
In a speech read on his behalf, the Minister of Finance, Mr Seth Terkper, said the development of the National Policy on Public Investment Management (PIM) and subsequent approval by Cabinet was an added confirmation of the government’s resolve to improve on public financial management.
“The design of the PIMS shows the level of transparency that the government intends to show in the management of public investment, especially capital spending. The PIMS has robust analytical functions to generate readily available data on public investment for the planning and decision-making process,” he said.
According to Mr Terkper, recent developments in the local economy have warranted a change in the way public investments are undertaken in order to address the challenges by introducing reforms.
“These developments include but are not limited to the desire to manage expected enhanced revenue from Ghana’s natural resources, including the hydrocarbon resources such as oil and gas. The transition to a lower middle-income country status with the eminent move from access to concessional or soft financing window to market-based financing scheme, including access to international capital markets,” he said.
He added that the need for Ghana to improve on public financial management to meet domestic and international targets and benchmarks as a middle-income country necessitated the formulation of the policy.
The implementation of the PIM Policy and the PIMS is expected to aid in the establishment of a clear linkage between national development policy objectives and project execution through the budget, to guarantee a clear path in tracing the progress of growth and development.
“It is also expected to streamline processes and procedures, roles and responsibilities in the delivery of public investment or projects. It will also help to adopt a holistic financing scheme for public investment and minimise concerns in rising public debt and growing public contract arrears,” Mr Terkper said.
The PIM Policy will be implemented in two phases. The first phase focuses on investment programmes by the ministries, departments and agencies (MDAs), metropolitan, municipal and district assemblies (MMDAs) and state-owned enterprises (SOEs), which may require direct or indirect financial support from the government.
“The second phase will cover the entire public investment programme for general government. The policy shall be made available in both print and electronic media and further disseminated through sensitisation programmes,” he said.