By Edzorna Francis Mensah
Parliament by Majority Decision, has approved a financing agreement for the implementation of the First Resilient Recovery Development Policy Operation (DPO1), Financing Ghana Productive Safety Net Project Il, for the Concessional Financing Agreement between the Government of the Republic of Ghana (represented by the Ministry of Finance) and the International Development Association (IDA) for an amount of three hundred million United States dollars (US$300,000,000.00) to finance the First Resilient Recovery Development Policy Financing in accordance with Article 181 of the Constitution and Order 169 of the Standing Orders of the Parliament of Ghana.
The objectives of the facility relative to the IMF-supported PC-PEG aimed to restore macroeconomic stability, debt sustainability and to support inclusive growth while protecting the poor and vulnerable. It also targets strengthening monetary and exchange rate policies to lower inflation and restore external buffers.
The facility will also involve initiatives aimed at maintaining the stability of the financial sector, implementing policies to promote private investment and growth, and making the required changes to enhance public sector efficiency, governance, and transparency.
Along with the government’s fiscal adjustment program and extensive structural changes, the government is also implementing a comprehensive debt operation that will help stabilise public finances and debt.
Providing justifications for government actions , the Chairman of the Finance Committee in parliament, Kwaku Kwarteng, in presenting the committee’s report, said, “to sustain the progress made in the macroeconomic sector, the Government of Ghana has secured an amount of three hundred million United States dollars (US$300.0 million) Credit from the International Development Association (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.
Meanwhile, the NDC Minority has expressed their concerns about the extent of borrowing by Government and taken the view that Government should rather 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, fax exemptions pending before the Finance Committee of Parliament amount to about GH¢5.5 billion, that is US$449 million in dollar terms. They further pointed to some additional GH¢7.0 billion tax exemptions, which they indicated were being processed to Parliament.
They expressed concerns that, put together, these tax exemptions will amount to some GH¢12.5 billion, which outstrips the GH¢11 billion that the Government seeks to mobilise from new taxes introduced in the 2024 budget.
