Parliament approves $300 million World Bank loan

Parliament approves $300 million World Bank loan

Parliament on Friday approved a US$300 million loan to finance the first Resilient Recovery Development Policy Financing despite an initial strong opposition from the National Democratic Congress (NDC) parliamentary Minority.

The concessional financing agreement between the Government of Ghana and the International Development Association (IDA) of the World Bank Group has a grant element of 26%, a repayment period of 25 years and a five-year grace period.

The facility seeks to restore fiscal sustainability, support financial sector stability and private sector development, improve energy sector financial discipline and strengthen social and climate resilience.

Kwaku Kwarteng, the chairman of the finance committee of Parliament in his report to the House, said to sustain the progress made in the macroeconomics sector the Government of Ghana had secured an amount of US$300 million credit from IDA of the World Bank Group for the First Resilient Recovery Development Policy Operation (DPO1) Financing which constitutes the first tranche of the World Bank US$900 million programmatic Development Policy Operation (DPO) series for Financial Year 2023-2025.

The National Democratic Congress (NDC) Minority expressed concerns about the extent of borrowing by the Government and thought that it should deepen measures to maximise domestic revenue.

They strongly objected to the numerous tax exemption applications currently before Parliament, which they cited as examples of avenues from which domestic revenue could be mobilised.

According to the Minority, tax exemptions before the finance committee of Parliament amount to about GHC5.5 billion, which is US$449 million in dollar terms.

They expressed concerns that these tax exemptions would amount to some GHC12.5 billion, which outstrips the GHC11 billion that the government seeks to mobilise from new taxes introduced in the 2024 Budget.

Dr Mohammed Amin Adam, the Minister for Finance, in his remarks, reiterated his commitment to review the tax exemption requests and report back to the House in two weeks.

“I want to assure them (the Minority) that I will take a look at these exemptions. I will rationalise it; I’ll review it and I’ll come back in two weeks to report to Parliament, and I hope that when I come, Honourable Members will support me in whatever rationalisation we are going to do.”