Senior Partner at AB & David Africa, David Ofosu-Dorte, has underscored the urgent need for Ghana to establish credible guarantee entities as a strategic response to growing investor concerns linked to regional instability in Africa.

Speaking at the Joy Business Economic Forum on Wednesday, June 25, Mr Ofosu-Dorte explained that despite Ghana’s relative stability, the perception of Africa as a high-risk investment destination continues to deter foreign investors.

“When you are looking at conflict, look at conflicts which are near. For example, the M23 crisis involving Congo, Rwanda, and Uganda appears disconnected from Ghana. Yet, to a typical investor in the West, who may not understand Africa’s geography or politics, reading about M23 gives the impression that Congo is next to Ghana. That leads to a broad-brush risk classification across the continent,” he explained.

To counter this, he called for the creation of institutional frameworks or "guarantee entities" that can underwrite investment risks locally and boost investor confidence.

“We combat this perception through our ability to create guarantee entities,” he noted. “A typical one is the Ghana Infrastructure Investment Fund (GIIF). Create a guarantee entity that underwrites such risks. This reduces our reliance on external credit ratings and gives us control over how we manage and present investment risks.”

Mr Ofosu-Dorte praised the GIIF and other development finance mechanisms as promising models but stressed the need to scale up efforts.

He pointed out that large-scale project defaults are relatively rare, and much of the investor hesitation is based on perception rather than fact.

“The African Development Bank has been talking about this lately. These risks don’t actually materialise in most mega projects; defaults rarely happen. So the issue is perception. And instead of lamenting poor credit ratings, we should act by creating our own guarantee entities to underwrite such risks.”

He concluded that building a robust, credible guarantee system would be a proactive step toward positioning Ghana, and by extension, Africa, as a secure and competitive investment destination.