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Thursday, November 19, 2009

We can't do without borrowing - Dep. Finance Minister

A Deputy Minister of Finance and Economic Planning, Mr Seth Tekperh, has given the strongest indication yet that Ghana would continue to rely on the World Bank and the IMF for support.

Mr Tekperh said there is no evidence in history that the country’s reliance on the two Bretton Woods institutions has led it astray in the formulation of its fiscal policies.

“Every country borrows and Ghana will continue to borrow; Ghana hasn’t got sufficient resources internally to develop. Our history suggests therefore that both under the NDC and under the NPP, [dependence on IMF and the World Bank] has not constrained us from growing,” he stressed.

The deputy Finance Minister was responding to suggestions that Ghana has been overly-dependent on the World Bank and the IMF, a situation which eventually constrains the country’s budgets and policies.

He said the two international financial institutions will continue to be the country’s source of long-term “non-concessional financing.”
“If you need non-concessional financing for 20 – 25 years for major infrastructural developments, the World Bank is indispensable,” he told Joy FM's Super Morning Show host Kojo Oppong-Nkrumah.

His comments firms the argument of the Finance Minister on the floor of Parliament on Wednesday that Ghana has had to occasionally “turn to the IMF/World Bank for financial support due to the huge resource gap in government finances and the balance of payment weakness.”

The National Democratic Congress (NDC) administration has received various loans and grants from the IMF and World Bank since it assumed power some 10 months ago. For example, the World Bank is expected to provide a US$1.2 billion interest-free loan to Ghana over the next three years.

Mr Tekper chided the erstwhile New Patriotic Party (NPP) government for failing to disclose certain debts, the effect of which is driving the government out for help.

“We discovered more arrears which were not disclosed [but] which should have been disclosed, so that you plan accordingly,” he said.

He also urged contractors working on various projects to continue and finish contracts awarded them by the previous government.

“If you have work in progress, continue it, if you are constructing schools…continue it. Don’t leave the old projects and think that you develop new ones. You only end up with uncompleted projects with arrears,” he stressed.

Mr Tekper indicated that the government would “continue to explore avenues for securing funding with the view to completing the 5,100 safe and decent low-income houses” as indicated by the Finance Minister on the floor of Parliament on Wednesday.

Story by Fiifi Koomson/Myjoyonline.com/Ghana

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