New financing approach for Ghana railway project

By: ACEYE0 comments

Africa Centre for Entrepreneurship and Youth Empowerment (ACEYE), has highlighted strategies to be adopted in the financing and funding of Ghana Railway Project. ACEYE is an entrepreneurial and policy think tank that promotes entrepreneurship through research and advocacy.

Though financing and funding is used interchangeably by most politicians and media personnel, there is a great difference. It is the funding strategies that enable settle finance.

The funding may come from freight carriage revenues, subsidies from government and revenues from other assets owned by the railway corporation.

It is very essential to define the business model that will be adopted by the Railway Industry. Strategic questions such as ‘what are the trains going to carry? What is the mission of the railway industry?

Are the trains going to run on bio-diesel, electricity or lithium batteries? An answer to this question will demand a restructure in the financing and funding strategies.

If the trains will use bio-diesel, then the rising cost of fuel in the country will distort the funding. Again, if it is going to be run on electricity, then “dumsor” situation has to stop completely.

The 2020 budget states that the railway development involves the rehabilitation of old lines and the development of new lines. The Accra-Tema railway is complete and has been operating since January 2019. The existing railway lines will operate whiles the construction of the new line goes on is a good step.

Close monitoring on the funding stream for the Accra-Tema line and used as a pilot for the entire project.The railway industry has collapsed before so the country cannot afford to fail in this plan.

ACEYE continues to dig into knowledge to support better decision making on the railway infrastructure development. They advocate for the government’s attention to this information and factor them into policy developments.

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