Seth Terkper, Minister of Finance
Seth Terkper, Minister of Finance

The Deputy Minister of Finance, Cassiel Ato Foraon, has stated that Ghana has made significant progress on socio-economic development which propelled the country into a middle income status.

Seth Terkper, Minister of Finance
Seth Terkper, Minister of Finance

This statement was contained in the report of the Finance Committee of Parliament on the Loan Agreement between the Republic of Ghana and the African Development Fund for an amount US$56.80 million in support of the phase one of the public financial management and private sector competitiveness support programme.

The Minster of Finance Mr. Seth Emmanuel Terkper on Thursday July 9, 2015 presented a request to Parliament for the approval of the loan Agreement in accordance with Article 181 of the 1992 Constitution. The agreement was then referred to the Finance Committee for consideration and report in accordance with Order 169 of the standing Orders of the House.

In pursuant to the referral, the committee met with the deputy Finance minster and officials from the Ministry of Finance.
According to the minister the objective of the programme is to support the implementation of the government medium-term development agenda aimed at building a strong foundation for inclusive and self-reliant economic growth.

He said the?government continues to show its commitment? to sustain economic growth to consolidate the transition ?of a full middle income country has encouraged the government?s development partners to continue to support the it?s development efforts by providing budgetary support? and capacity building assistance.

Additionally, it is to strengthen the Fiscal consolidation and PFM reforms to restore macroeconomic stability, and enhance private sector-led competitiveness through improved access to electricity and SMEs? access to finance.

Mr. Forson observed that the fiscal component of the program aims at eliminating existing weaknesses that constrain private sector growth and competitiveness, hence measures would be implemented to address the power shortage problem.

The overall budget support programme is 75 million Units Account and would be implemented in two phases. The first Phase, amounting to US$56.80 million of which the request for approval was being sought would be disbursed to government this year?with the second and final phase amounting to US$49.70million, to be?disbursed in 2016 under a separate Loan Agreement.

In a related development, parliament has given approval for the fiscal agreement between the government of Ghana and the International Development Association (IDA) for an amount of US$ 150.00 million Equivalent to support the Macro-Economic stability for competitiveness and growth Development Policy Financing.
Additionally, approval was also given for the Identity Agreement between the Government of Ghana and the International Development Association (IDA) for a Policy-Based Guarantee of US$ 400 million in respect of?? the first Macro-Economic stability for competitiveness and growth Development policy financing.

Justifying the request for the loan, the Minister of Finance Mr. Seth Terkper noted that the 2012-2014 Fiscal year came under a severe economic stress from both domestic and external shocks. However, government had responded to these shocks by implementing a number of policies and measures to reverse the trend.
?Notwithstanding government?s programs aimed at strengthening fiscal consolidation, significant institutional, policy and systems and process weaknesses continue to manifest themselves, thus limiting the impact of reforms already implemented and leading the country into an unsustainable fiscal path,? he stated.

He said?there is the need to make public expenditure more efficient and effective by continuing with the ongoing reforms in the Public Financial Management (PFM), and to enhance the credibility of the budget which had hitherto been low and had adversely impacted service delivery efficiency in government.
According to him until these weaknesses are?addressed, efficient and effective fiscal consolidation would not be achieved.



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