Assenting to anti-LGBTQ+ bill will affect 2024 Budget – Finance Ministry cautions Akufo-Addo

The Ministry of Finance has advised President Nana Addo Dankwa Akufo-Addo against assenting to the country’s anti-gay bill, cautioning that it will create a financing gap in the 2024 budget.

This is contained in a paper written to the President, indicating the passage of the Bill by Parliament has triggered reactions from some of Ghana’s Development Partners, International Financial Institutions, and CSOs in the country.

In the paper sent to the President, the Finance Ministry said there would be consequences if President Akufo-Addo assented to the bill.

The paper said Ghana is likely to lose US$3.8 billion in World Bank Financing over the next five to six years.

It added that for 2024, Ghana will lose US$600 million in budget support and US$250 million for the Financial Stability Fund.

The paper said this would negatively impact Ghana’s foreign exchange reserves and exchange rate stability as these inflows are expected to shore up the country’s reserve position.

The Finance Minister insists that this will lead to a potential loss of these financial resources, creating a financing gap in the 2024 budget that the government must address through additional domestic revenue mobilisation and a significant reduction in expenditure.

“Failing this, Government’s ability to achieve the targets in the 2024 Budget will be undermined and the IMF-ECF Programme is likely to be derailed,” the paper from the Ministry of Finance to President Akufo-Addo said.

The Finance Minister further noted that while no direct conditionality in the IMF-ECF Programme relating to the passage of the Bill has been identified, the principles of the current IMF-ECF Programme are built on predictable financing from Development Partners (Financing Assurances) including the World Bank-funded Ghana Resilience Recovery Development Policy Operations (DPO).

The Ministry said as a result, the non-disbursement of the Budget Support from the World Bank will derail the IMF programme, which puts Ghana at risk of ultimately losing out on US $720 million which would have been disbursed after the second and third review.

“This will in turn trigger a market reaction which will affect the stability of the exchange rate,” part of the paper said.