Ghana has subscribed to join as a member of the Asian Infrastructure Investment Bank (AIIB), which will provide the country with enhanced opportunities to obtain financing for eligible projects from the bank, as well as deepen Ghana’s economic relations with other member-countries.
This follows adoption of the report and ratification of the Articles of Agreement of AIIB by Parliament on Thursday.
According to a report of the Finance Committee on the Articles of Agreement of the Asian Infrastructure Investment Bank (AIIB), Ghana’s membership of the AIIB will improve the country’s access to affordable financing for infrastructure investment – which is an important enabler for economic development, fostering urbanisation of the growing middle-class, and helping to meet the demand for housing, roads, public transport and commercial accommodation.
The AIIB membership is also expected to minimise the issuance of government guarantees for state-funded projects, since AIIB will issue the guarantee on behalf of members in appropriate circumstances.
The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank with a mission to improve social and economic outcomes in Asia and beyond, with focus on sustainable infrastructure, cross-border connectivity and private capital mobilisation.
Membership into the AIIB has financial implications for Ghana, as members are required to subscribe for the capital stock of AIIB.
Per the Board of Governors resolution of 18th December 2018, Ghana will subscribe to fifty (50) shares that will be paid-in and forty (40) being callable shares. With the par value of each share being US$100,000, the total cost of Ghana’s shares is US$5m, of which US$1m is to be paid-in and the remaining US$4m being callable.
The report also added that, currently, AIIB has 100 members worldwide, comprising 72 full members and 28 prospective members. Some African countries including Egypt, Ethiopia, Guinea, Madagascar and Sudan are members of the bank.
The Committee report also noted that since its inception, the AIIB has approved funding for 44 projects across member-countries. In all, a total amount of US$8.5billion has been approved for those projects – which include projects in the energy, transportation, infrastructure, water supply and equity investment sectors.
The government of Ghana, in a letter dated 17th July 2018, expressed interest in joining the AIB to provide opportunities to leverage on its accession to raise capital for infrastructure investments.
The AIIB Articles of Agreement contain sixty Articles divided into eleven chapters and two schedules. Chapter 1, comprises Articles 1-3 and provides for the purpose, functions and membership of the bank.
The bank’s purpose is to, among other things, foster sustainable economic development; create wealth and improve infrastructure and other productive sectors; and promote regional cooperation and partnership in addressing development challenges by working in close collaboration with other multilateral and bilateral development institutions.