Pierre Frank Laporte, World Bank Country Director for Ghana, has stated that Ghana’s current challenges are largely fiscal and not just the inability to raise enough revenues to undertake government’s programs.
According to the Country Director, there were already challenges with the fiscals even before the outbreak of the COVID-19 pandemic, which he said, has resulted in a difficult environment for businesses, as well as spillovers from other sectors of the economy, especially the energy sector.
“The big issue has been on the fiscal side. Before the current crisis happened, we observed certain challenges on the budget side that really has been the area more hit by everything… where actions are required now to deal with them.
“For instance, on the revenue side, we have always been saying that this is an area where Ghana should do better. We are encouraged by the fact that this should be one of the areas for potential programme and support from the World Bank. The problem is fiscal, not just revenue.
“The problem is that there are also spillovers from other sectors. For instance, the energy sector. There is about one billion dollars going to the energy sector because of losses. The sector itself is not financially viable and to keep it going you have to subsidize.”Pierre Frank Laporte
Mr. Laporte was speaking on the challenges that forced Ghana into a situation where the country is now seeking support from the International Monetary Fund (IMF).
As the country battles the multifaceted crisis, the World Bank Country Director for Ghana asserted that “Actions are required” because with COVID, “the general business environment is being a bit more difficult”.
Mr Laporte disclosed that Ghana will likely receive about 600 million dollars as balance of payment support for next year’s budget if the country is able to meet all the criteria set by the Bretton Woods Institution.
“Normally, there is a hard rule and soft rule, we can give around 30 to 40 percent of the country’s budget support and for Ghana, we are looking around $600million. Ghana’s envelope for the next three years is $1.5billion.”Pierre Frank Laporte
Ghana spent COVID fund in line with procurement laws
Meanwhile, Pierre Frank Laporte disclosed that the government of Ghana spent the $430 million COVID support from the Bretton Woods institution in line with procurement requirements.
He said the World Bank is satisfied with the way Ghana spent the funds after its audits contrary to claims by Former President, John Dramani Mahama, that the government was imprudent in the use of COVID funds.
“We have done audits, of course there are few issues here and there, but largely speaking we are very satisfied. Our result is, spending line met the procurement requirements that existed.
“COVID was implemented under emergency procurement measures. All of the COVID funds were not spent, it is a project; there were things to be spent on, but there was also construction and procurement of equipment. So we don’t feel our resources have not been properly spent.”Pierre Frank Laporte
However, Mr. Dramani Mahama has insisted that “The economic problem we are facing stem from imprudent election-related expenditure and reckless decision-making in the management of the economy”.