The Deputy Minister of Finance, Mr. John Kumah has disclosed that the outstanding loans that parliament approved following its recall to the House on Tuesday, May 2, 2023 were loans that had already been contracted but required parliamentary approval.
According to Mr. Kumah, the loans will help the economy in terms of government priorities and commitments, adding that; “Reforms are necessary to achieve efficiency in the country’s financial administration, and they are positive loans that will impact the economy.”
Mr. Kumah further stated that the recall of parliament was to complete an “important assignment of loans that has been contracted previously but have not yet been ratified in parliament.”
“Some of the loans comprise; a World Bank/IDA International Development Association Support for our Public Sector Reforms and Digitalization Agenda of Government.”
Mr. John Kumah
According to Mr. Kumah, they had to reallocate some funds of US$750m from Afreximbank that was approved last year.
“We needed to reallocate some of the funds to some more priority projects of government, so these are not new loans, these are some of the reallocation we did and to approve the already made available funds, which parliament had not been able to approve.”
Mr. John Kumah
The deputy finance minister also averred that parliament looked at the EIB facility of 170m euros which was on-lend to the Development Bank of Ghana (DBG).
“So, parliament just approved the on-lending agreement between government of Ghana and DBG. Hence, we just want to put on record that government is not taking any facility, these are loans we have already contracted on our books and require parliamentary approval.”
“The loans include financing agreement between government of ghana and International Development Association (IDA) of the World Bank Group for an amount of $150m to finance the West Africa Food System Resilience Programme. -Phase 2 under the Multi-Phase Programmatic Approach, financing agreement between GoG and IDA for an amount of $200m to finance the Ghana Digital Acceleration Project, financing agreement between GoG and IDA for an amount of U$60.6m as a third additional financing for the Ghana COVID-19 emergency preparedness and response project.”
Mr. John Kumah
Minority Leader, Dr.Ato Forson on his part indicated that his caucus voted against the loans, “majority alone to bear the cross.”
Other bills that were approved includes; Excise Tax Stamp (Amendment)Bill 2022, Standard for Automatic Exchange of Financial Account Information (Amendment) Bill, 2023 -it seeks to strengthen due diligence procedures and prescribe circumvention
Ghana Lawmakers Pass Finance Bills To Tap IMF Loan
Meanwhile, according to the Second Deputy Speaker, Mr. Andrew Asiamah Amoako, the parliament, which had been in recess, reconvened to review the excise tax stamp and approve concessional loans totaling $710 million, also approved standards for the automatic exchange of financial accounts information, while a bill to revise the formula for distributing education trust funds was postponed, he said.
Ghana is awaiting the decision of an official creditor committee on its request for debt relief. A favorable outcome in the form of financing assurances will open the door for IMF’s board to approve a $3 billion loan for the West African nation, which is in the process of restructuring almost all of its debt, that stood at 576 billion cedis at the end of November.
Before then, however, Ghana is taking steps to help boost its tax base and lift it from among the lowest in sub-Saharan Africa. The country’s tax-to-GDP ratio in 2022 was less than 13% compared with the 18% average for the sub-region, according to the finance ministry.
Read also: Banks In Ghana Record Losses In 2022 Due To Debt Restructuring Programme
