The African Development Bank (AfDB) and Ghana have signed a $102.59 million protocol agreement for budget support.
The grant is to support the government’s Fiscal Consolidation and Economic Recovery Programme aimed at boosting recent fiscal consolidation and economic recovery reforms.
Mrs. Abena Osei-Asare, a Deputy Ministry of Finance, speaking at the signing ceremony, said the grant signified more than just financial assistance; it represented a vote of confidence, in a partnership built on trust, shared objectives and a firm belief in Ghana’s prospects.
The Minister said the two parties were deepening the partnership with the signing of agreement for the implementation of the Budget Support Programme agreed.
The programme is expected to enhance fiscal consolidation measures and contribute to increasing resource mobilization intended to create more financial capacity for the government’s investments in the country.
It will also strengthen the financial sector to attract private investment into critical sectors of the economy, including the agricultural sector.
Overall, the programme will facilitate the government’s economic recovery reforms through enhanced public finance, increased productivity, and job creation.
This programme is a comprehensive strategy, designed to address pressing economic challenges, foster sustainable growth, enhance fiscal consolidation, and promote inclusivity within our society. We are therefore dedicated to harnessing this potential for the benefit of all our citizens.
She said the work of economic recovery was underway, while GDP growth had picked up, consumer price inflation was on the decline, exchange rate depreciation had dramatically slowed down and the budget deficit as a percentage of GDP was on the decline.
She said with these trends, a sense of a “new beginning” had taken hold evidenced by the strong support we received from the development partners for the important measures taken by the Government to turnaround the economy.
The Ministry commended the Bank for their steadfast support and commitment to Ghana, particularly, over the past three years as “we navigated an unprecedented confluence of crises.”
She said the Bank had been a true partner in these difficult times and their responsiveness since the initial engagement in February 2023 had been reassuring and remarkable.
She said Ghana, like many other nations, had faced unparalleled challenges in recent years, with the global pandemic severely affecting our economy and straining the resources.
However, it is during times of adversity that the country’s resilience and determination are most evident.
“We have adapted and innovated, and with the support of the African Development Bank, we are now poised to seize the opportunities ahead,” she added.
Madam Eyerusalem Fasika, Ghana Country Manager, said “This is a timely intervention that will propel efforts by the government to restore macroeconomic stability in the country.”
She said, “Public Finance Management is the catalytic force that will drive the government’s different reforms to achieve the common overarching objective of macroeconomic stability and sustainable growth.”
She said Ghana’s economy had been stressed by global developments, including the effects of the Covid-19 pandemic, global financial tightening, and Russia’s invasion of Ukraine.
“These factors have compounded domestic challenges to undermine revenue mobilization and economic growth,” she added.
She said the grant, from the African Development Fund, the Group’s concessionary lending arm, was approved on Tuesday 31 October 2023.
The programme will be implemented over a two-year period from 2023 to 2024 by the government in close collaboration with the AfDB.
It complements an ongoing International Monetary Fund (IMF) Extended Credit Facility to the country.
She said the Bank and the government had jointly worked hard in developing the Programme over the past few months and the signing ceremony marked a key milestone in the efforts of the government to rebound the economy.
Currently, the Bank Group’s active country portfolio in Ghana consists of 20 operations (15 public and 5 private), with a total commitment of 726 million USD across various sectors- the transport sector accounts for the largest followed by agriculture.
The portfolio also involves projects in economic governance, energy, water and sanitation, and human capital development.
These ongoing projects in addition to the Budget Support Programme will support Ghana’s recovery and development efforts and contribute to the Bank’s high five priority dimensions in Ghana.
These are Light Up and Power Ghana, Feed Ghana; Industrialize Ghana; Integrate Ghana; and Improve the quality of life of Ghanaians.
“We are confident that the government will remain committed to their forms identified in the programme to take full advantage of it to address the current difficult economic conditions faced by the country.
She reaffirmed the commitment and the availability of the Bank in supporting the efforts of the government and the people of Ghana in addressing the country’s recovery efforts and development agenda.
GNA