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11.11.2003 Business & Finance

ADF Signs A Us$ 49.5-Million Loan Agreement With Ghana

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...To Finance A Poverty Reduction Support Project Tunis, 11 November 2003 – Mr. Olabisi Ogunjobi, Vice-President of the African Development Bank Group in charge of West and Central Operations and Microfinance, and the Ambassador of Ghana in Morocco, Mr. Kobina Annan, signed in Tunis on Wednesday, 5 November 2003, an agreement for an African Development Fund loan of 34.58 million Units of account (UA)*, equivalent to 49.5 million US dollars, to finance the Poverty Reduction Support Project (PRSL) in Ghana.

Mr. Ogunjobi said the Loan seeks to assist the Government of Ghana to enhance governance and public sector management, which are of critical importance for the effective implementation of the Ghana Poverty Reduction Strategy (GPRS).

“The loan will, in that context, support important reform measures to improve the performance of the public sector, strengthen the fiduciary framework and public sector management, and enhance the Capacity for Monitoring and evaluation of the implementation of the Government’s poverty reduction agenda,” he added.

In his comment, Mr. Annan said Ghana was making progress in economic reform aimed at accelerating development and poverty reduction. The loan would assist in the implementation of new mechanisms for budgetary control, public finance management as well as enhance public sector transparency and accountability, he emphasised.

The Government of Ghana finalised its 2003-2005 GPRS in February 2003 as the guiding framework for government policies, external support from donors and for the use of resources under the enhanced HIPC initiative.

The Poverty Reduction Support Loan will provide budget support to the Government of Ghana within the framework of a Multi-Donor Budget Support programme (MDBS), and will focus on governance and public sector management, which are essential for implementing the GPRS. It will support an improved framework for public sector management with respect to public finance management, translation of the GPRS into the budget, public sector reform, decentralization, and economic governance.

These are expected to lead to more efficient utilisation of resources, improved financial management, a more effective management through the budgetary operationalization of the GPRS, improved local government-service delivery that will promote broad-based community participation in economic activity, and enhanced public sector accountability and transparency through good political and economic governance especially the improvement of the public sector procurement system. Thus, the measures supported by the loan will provide an improved environment for economic growth, social and human development and poverty reduction.

This loan is in line with the Bank Group’s Country Strategy Paper (CSP) for Ghana 2002-2004, which was approved by the Boards of Directors in May 2003. Bank Group operations started in Ghana in 1973. To date, the total commitment of the Bank in the country is equivalent to US$ 1.024 billion in 66 operations. Total disbursements stand at US$ 715.77 million.

Executing Agency: Ministry of Finance and Economic Planning, P.O. Box M 40, Accra, Ghana – Tel: +233 21 66 53 10 – Fax: +233 21 66 38 54 *1 UC = 1.43178 US$ = 12,031.3 GHC as at 01/11/2003

The ADB Group comprises the African Development Bank (ADB), the African Development Fund (ADF) and the Nigeria Trust Fund (NTF). Membership of the Bank comprises 53 African (Regional) and 24 non-African (Non-Regional) States.

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