Parliament approves finance arrangements worth $750 million

Yesterday, the Parliament reassembled for an urgent matter, and seven loan agreements totaling $750 million were approved to advance public sector reforms, food security, COVID-19 response actions, and the digital acceleration agenda.

The facilities were an on-lending agreement between the Government of Ghana (GoG) and the International Development Association (IDA) of the World Bank Group for an amount of $150 million to finance the second phase of the Multipurpose Programme Approach for the West Africa Food System Resilience Programme.

Additionally approved were agreements worth $60.6 million between the GoG and the IDA of the World Bank Group as a third additional financing for Ghana’s COVID-19 emergency preparedness, and a €170 million agreement between the GoG and the Development Bank of Ghana for the establishment of the Development Bank of Ghana.

A $30 million response project, an agreement between the Government of Ghana and the Government of the Republic of Korea (acting through the Export-Import Bank of Korea-Government Agency for the Economic Development Cooperation Fund (EDCF)], a $150 million agreement between the Government of Ghana and the International Development Association of the World Bank to finance the Primary Healthcare Investment Project, and a $150 million agreement between the Government of Ghana and the IDA to finance the Public Financial Management Project are all in place.

A financing agreement between the GoG and the IDA for $200 million to support the Ghana Digital Acceleration Project was also authorized by the House.

Urgent Business

The House was scheduled to approve the loan agreements before it adjourned sine die on March 31, 2023. These agreements were already on the books.

On April 20, Alban Sumana Kingsford Bagbin, Speaker of the House, sent out a notice asking Members to report back from vacation for a one-day emergency session.

In a recall document that Mr. Bagbin signed, it was stated that on Tuesday, May 2, 2023, the Members of Parliament (MPs) were to report to the legislative assembly to discuss “urgent parliamentary business.”

Approval

The loan agreements were approved when they reconvened after Kwaku Kwarteng, the chairman of the finance committee, had presented the finance committee’s reports on the agreements and informed the House that the agreements were approved by a majority decision at the committee level, despite all of the minority members voting against the agreements.

He made the resolution for the House to adopt the committee reports and approve the facilities after delivering the report.

Why minorities are against deals

Dr. Cassiel Ato Forson, the minority leader, weighed in on the discussion and said that considering the significant impact loans have had on the nation, he did not believe it was appropriate for the government to take on further debt.

He claimed that Ghana was currently insolvent and had missed payments on both its domestic and external debts.

He used the fact that one of the rating companies Ghana’s government had hired had downgraded the country just last week as an example. Ghana was now in “restrictive default.” “Mr Speaker, simply put, we are in a deep hole and what I know is that when you are in a hole the first thing you do is to stop digging.”

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