The International Monetary Fund (IMF) and the World Bank have indicated their support for Ghana’s efforts at securing a $3 billion loan from China, the Minister for Finance and Economic Planning, Dr Kwabena Duffuor, has said.
However, he said, the Fund would meet to take a firm decision in December this year, after a country economic review exercise which would determine the impact of the loan on the economy and whether it breached any agreements following a presentation to a joint World Bank /IMF Tam in Washington on September 28, 2011 by the government on what the loan would be used for and its viability.
The IMF, on the other hand, will send a team to Ghana on October 12, 2011 to conduct the fifth review of the economy under the Extended Credit Facility, which will cover areas such as recent economic policy performance and challenges going forward.
The IMF supports Ghana mainly to fix its macroeconomic indicators to achieve the stability needed for business planning and growth, while the World Bank broadly supports projects through the national budget and sector specific interventions to achieve growth and development while reducing poverty.
Dr Duffuor, who led the team that made a case for the $3 billion loan in Washington, told the Daily Graphic that “the two institutions have not shot down the loan; they are rather supportive, as they believe it will have a positive impact on the economy and the quality of lives of the people.”
He explained that the fifth economic review starting from October 12, 2011 under the Credit Facility Programme, which would have terms different from the fourth, the IMF Board would meet to take a decision in December, during which a new non-concessional credit/lending limit would be set.
The current agreement, reached in May 2011 and which expires in June 2011, puts the ceiling on non-concessional loans at $800 million. The limit was set at a time when oil revenue inflows had just started trickling in. Ghana’s remarkable and unprecedented growth of 23 per cent in its Gross Domestic Product (GDP) means that an upward review of credit limit for non-concessional loans is likely.
Dr Duffuor said Ghana had already done its own assessment of the $3 billion loan from China, which will fund infrastructure projects, including a comprehensive gas infrastructure.
Parliament has already approved the Master Facility Agreement covering the $3 billion loan which will be used on a number of projects, such as gas processing facility, gas transmission pipelines and the building of railways and trunk roads
No comments:
Post a Comment