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Parliament approves $300m loan agreement after initial rejection by Minority2 min read

Parliament approves $300m loan agreement after initial rejection by Minority<span class="wtr-time-wrap after-title"><span class="wtr-time-number">2</span> min read</span>

Parliament has approved a $300 million loan from the World Bank to support the First Resilient Recovery Development Policy Financing.

The Resilient Recovery Development Policy Operation is the first in a series of three operations of $300 million each and part of a broad World Bank engagement for crisis response and resilience in Ghana.

Its objectives are to restore fiscal sustainability, support financial sector stability and private sector development, improve energy sector financial discipline and strengthen social and climate resilience.

The government is also requesting additional $150 million for the ongoing Greater Accra Resilient and Integrated Development (GARID) Project.

It will work to improve flood risk and solid waste management in the Odaw River basin and improve access to basic infrastructure and services in the targeted flood prone low-income communities in the Greater Accra region.

Approval of the loan agreement was initially met with opposition from the Minority in Parliament who suggested that the government withdrew the tax waiver requests for companies involved in the One District One Factory policy to generate the money internally.

However, the Minister of Finance, Mohammed Amin Adam assured the minority of his commitment to review the tax exemption requests and report back to the House in two weeks.

“I want to assure them [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,” he said.

The Minister of Finance used the opportunity to explain the loan agreement to lawmakers.

“Mr Speaker, let me take this opportunity to clarify a few issues. First of all, this is not an IMF facility, it is a World Bank facility. It is a concessional facility for 25 years. The payment period has a grace period of five years interest of about 1.25 percent and it has a grand element of 26 per cent,” he explained.

“It is concessional and this house is familiar with that concessional facilities. Secondly, it is a budget support. This same house approved the financing for the 2024 budget, a total financing of 61 billion. And this is one of the facilities that we are pursuing to finance the 2024 budget. And therefore as we already know, the 2024 budget, through this house, allocated resources to different projects and programmes for the year.” Mohammed Amin Adam added.