ModernGhana logo
01.06.2004 Business & Finance

We Need Fairness In Lending Packages — Osafo-Maafo

Listen to article

The Finance and Economic Planning Minister, Mr Yaw Osafo-Maafo, has called on multilateral donor agencies to reconsider their lending packages to promote fairness.

He proposed that aid to developing countries should be divided into three categories: countries that need only grants,those that require a mixture of aid and loans and those that must borrow only.

Mr Osafo-Maafo made the call when the Under Secretary for International Affairs at the US Treasury Department, Mr John B. Taylor, paid a courtesy call on him in Accra yesterday. Mr Taylor also called on the minister of Trade, Industry and PSI, Mr Alan Kyerematen, and the Governor of the Bank of Ghana, Dr Paul Acquah, at their offices in Accra.

The proposal, which was first mooted in Uganda at the meeting of African Finance Ministers, postulates that the first category should be made up of countries that cannot borrow at all and should be given grants. The second would be a mixture of the ability to borrow and not to borrow and should be given both grants and loans, whereas the third category should be countries that have the wherewithal to borrow and must be given only loans.

According to Mr Osafo-Maafo, no country should be made to stay permanently in a category, but should move on to the next category once they better their conditions. He said the government was happy about the criteria used in selecting beneficiaries, saying, “it is fair and comprehensive.”

The minister said the criteria would encourage developing countries to strive hard to achieve the parameters, which were the very crucial elements in a democratic society.

He explained that Ghana would present projects selected from priority areas spelt out in the Ghana Poverty Reduction Strategy (GPRS) to access the Millennium Challenge Account.

Mr Osafo-Maafo disclosed that the ministry had set up a co-ordinating secretariat within the Finance Ministry to collate projects suitable to accessing the MCA, and so far, seven proposals have been received from the district assemblies.

Mr Taylor explained that the United States' determination to implement the Millennium Challenge Accounts (MCA) as soon as practicable and challenged Ghana to put in a proposal as soon as possible to access the account to boost its economic development.

Mr Taylor's role, which includes representing his country on many multilateral banks and bodies, such as the World Bank and the International Monetary Fund, was visiting the country for the second time to examine the extent of assistance to the country from multilateral donors and how effective it was assisting the country in achieving its development goals.

Having been in the country two years ago on similar mission, Mr Taylor said his assessments during this visit would enable the US and development partners to determine whether the aids were being utilised effectively and whether there was the need to increase the package.

According to him, Ghana was chosen among eight countries to access the initial $1 million in the MCA due to the country's exceptional macro economic performance, sound rule of law and an indication that the country was investing in its human resource.

“I am very impressed to see the extent to which inflation has gone down,” Mr Taylor stated when he called on the Governor of the BoG, Dr Paul Acquah.He said the reducing interest rates trends in the country, coupled with other positive macro economic indicators, were conditions that would blend perfectly with the goals of the MCA, which is aimed at increasing the real growth of developing economies, and ensuring that developing countries invest in their people and reducing poverty.Mr Taylor also held meetings behind closed doors with the three officials.

ModernGhana Links

Join our Newsletter