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31.05.2005 Business & Finance

Ghana, France sign €86mn Agreement

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Accra, May 31, GNA - Ghana and France on Tuesday signed two financing agreements, totalling 86 million Euros to support Ghana's development efforts.

The Minister of Finance, Mr Kwadwo Baah-Wiredu signed for Ghana while Mr Jean Francois Arnal, Resident Manager of Agence Francaise de Developpement, initialled for France.

Under the first agreement, France is converting 63 million Euros of Ghana's outstanding debt into grants with the aim to further reducing the country's debt burden and enhancing macroeconomic stability. By the terms of the Financing Agreement 21 million Euros out of the grant would be used as Budgetary support through the Multi Donor Budget Support (MDBS) Mechanism for a period of three years at seven million Euros per year.

The outstanding balance of the grant aid of 42 million Euros would be used to support Government Programmes in future through the MDBS. The second agreement involves the provision of a concessionary funding of 23 million Euros for the construction of roads and an interchange in the Kumasi Metropolis to promote the free flow of traffic in the city.

The money would also be used to construct a resettlement facility for affected wood workers in the project area at the Sokoban Wood Village.

The concessionary loan, which comes with an interest of one per cent per annum, has a repayment period of 20 years and a grace period of 10 years.

Mr Baah-Wiredu lauded the contribution of France to Ghana's development efforts especially in areas of urban and rural development, enhancing access to basic education, health and good drinking water. He said France's support should serve as a signal to other donors to help the country to meet the Millennium Development Goals by the target date of 2015.

Mr Pierre Jacquemot, French Ambassador to Ghana, said his country's decision to help stem from good governance and Ghana's ability to reach the Highly Indebted Poor Countries (HIPC) initiative completion point. He said France had already cancelled 64 million Euros of Ghana's debt in line with debt cancellation protocols agreed upon by the Paris Club members when the country attained the completion point.

Mr Jacquemot said France had decided to join the MDBS framework to harness efforts and contribute effectively to the development objectives of the country.

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