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20.08.2002 General News

Adopt Effective Financial Management - UK Envoy

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The British High Commission on Monday urged government to build sustainable institutions to ensure an effective public sector financial management.

Mr. Rod Pullen, High Commissioner, said such institutions would promote transparency and create the "climate of confidence" needed to attract and encourage domestic and foreign investors.

The High Commissioner was speaking at a regional workshop on "External Assistance and Aid Management," jointly organised by the West African Institute for Financial and Economic Management (WAIFEM) and Debt Relief International (DRI).

Mr. Pullen expressed the need for President John Agyekum Kufuor's administration to improve on investor confidence by facilitating the high standards of governance, public administration and democratic accountability.

The 10-day workshop was designed to enable the Ghana Government to analyse and monitor the effects of aid flows and prepare its case for future external assistance support by donors and creditors.

Mr. Pullen encouraged: "tackling corruption and building sustainable institutions that reflect transparent and effective public sector financial management," adding that procurement and revenue systems were other issues that needed government's serious attention.

He suggested the creation of an investment climate that would unlock domestic potential for investment, attract and retain foreign investment and encourage the establishment of new enterprises.

The High Commissioner stressed the need to tackle the debt problem through policies that would lower it to sustainable level to free resources necessary to tackle poverty.

Mr. Pullen said Britain was committed to focusing its international development efforts on the achievement of the Millennium Development Goals through the creation and maintenance of a stable macro-economic environment.

It would also develop the legal structures and regulatory reforms needed for markets to flourish and assist the strengthening of Sub-Regional and Regional Co-operation in tangible and practical forms.

Mr. Pullen expressed regret that too often agreements were signed, such as on trade and tariffs, but the failure to implement them effectively had affected growth throughout the region and contributed to keeping levels of poverty high.

On the Ghana Poverty Reduction Strategy (GPRS), the High Commissioner urged government and civil society to be committed to undertake the difficult reforms necessary to achieve its objectives.

"We all have a part to play in making the GPRS work, but the key role must be played by Ghana. It is essential that Ghana feels not only ownership of GPRS, but ensures its central role within the government's economic and budgetary planning and processes."

The Deputy Minister of Finance (MOP), Mrs. Grace Coleman, said the effective aid management in the country should be identified with clearly defined and consistent set of national development policies.

This would ensure that potential projects for external assistance were identified and prioritised with the full mobilisation of desired aid resources, and its optimal allocation to meet the highest priorities of the nation.

Mrs. Coleman said MOP, Bank of Ghana, Controller and Accountant-General's Department and other line ministries, departments and implementing agencies shared the responsibility of ensuring effective aid management.

The Deputy Minister reminded countries of the West African Sub-Region of the cost component of aid and cautioned that while maximising the benefits, the financial costs involved in the repayment of loans, losses associated with tying aid to uncompetitive donor/creditor market prices must be minimised.

This calls for the negotiation of better terms for loan facilities, ensure shorter disbursement period and effective monitoring policies.

Mrs. Coleman said the government had started talks to conclude bilateral negotiations with the Paris Club creditors and to seek comparable treatment of debt relief from non-Paris Club creditors.

She noted that the opting for the Highly Indebted Poor Countries (HIPC) initiative last year had yielded about ยข260.4 billion by August 16, 2002 from mainly multilateral creditors for poverty reduction related projects.

The expected relief for the year amounts to US$273 million.

Mrs. Coleman noted that what the country needed to consider now was "after HIPC, what next?" and suggested the establishment of a sustainable government team, capable of undertaking external assistance analysis on a regular basis.

In a welcome address, Dr. Chris O. Itsede, Director General, WAIFEM, said the workshop would consider and review existing aid and debt data, analyse and take steps required to strengthen their collection and recording.

Dr. Itsede said donor/government practices and implications, constraints for grants/loans disbursement would be reviewed and the combined results of new financing needs to fund poverty reduction and microeconomics scenarios analysed.

Participating countries include: Ghana, Nigeria, Liberia, Sierra Leone and international donor agencies.

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