The Ministry of Finance and Economic Planning has ruled out the possibility of relying solely on internally generated funds (IGF) for infrastructural projects in Ghana.
Government is currently in discussions with China for a $3 billion loan facility, while it is still negotiating with Korea and Brazil for extra funds for some major infrastructural projects in the country.
Some economists have questioned the continued borrowing from foreign donors and the potential consequences for the country in the future. But the Finance Ministry maintains that it is not prudent to support such huge developmental projects from government funds especially in a developing country like Ghana.
A deputy Minister for Finance, Seth Terkper, defended government�s position when he appeared on the Citi Breakfast Show on Friday July 15, 2011. �We can�t (rely on IGF). Inasmuch as it sounds unpalatable to Ghanaians, we are a developing country; we are just going to become a lower middle income country�
�Remember, even the advanced countries issue infrastructure bonds, so one of the reasons for the debt crisis in the US is that they fund their budgets through borrowing. Kenya is a very typical example. Kenya issues what is called long term infrastructure bonds to finance its roads. (For) many developing countries that�s the reason why they go to the World Bank in particular, the International Development Association, to borrow money which you repay over 25 years.
�There is no way you can put a Gh�3 billion project � when your total budget is Gh�9 to 10 billion originally � on the budget.�
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