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25.07.2005 Business & Finance

New World Bank Executive Director visits Ghana

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Accra, July 25, GNA - Finance and Economic Planning Minister Kwadwo Baah-Wiredu on Monday urged the G-8 Countries, World Bank (WB) and its allied institutions countries to come out with the cut-off date for the debt relief programme announced on June 11 2005 for poor countries. He told the visiting World Bank Executive Director, Mr Sid' Ahmed Dib during a curtsey call on him in Accra that if the cut-off date for the debt were fixed for the date when it was announced, it would help Ghana to better work out the details to access the facility.

Mr Baah-Wiredu said the long silence was creating doubts especially in the wake of publications on the leakage of a document from the International Monetary Fund that cast doubts on the commitment to the debt relief programme.

"Government intends to channel the benefits from the debt cancellation into poverty reduction programmes and projects", he said. The G-8 spearheaded by the United Kingdom on June 11 announced the cancellation of the debt owed it by 18 countries to the tune of 40 billion dollars with Ghana's portion estimated at 4.1 billion dollars. The amount represents about 80 per cent of Ghana's total debt.

The Government had indicated at a press conference after the announcement that it was expecting full details when the G-8 and the shareholders of the multilateral institutions met in July and September this year.

Mr Baah-Wiredu said the world price of crude oil was a source of concern to the Government because the commodity was the engine of growth and determined how the people would get sustainable employment. Therefore, any inflow would cushion sources of Government's funds and enable it to channel other resources into the purchase of crude oil whose prices keep on rising.

The Minister said current total revenue represented 24.6 per cent of GDP, which was 97 trillion cedis or 10.5 billion dollars. He also gave a run down of some of the Government's expenditure for this year, which included 220 million dollars for the road sector; 90 million dollars for health; 60 million dollars for education; 103 million dollars for urban water and 250 million dollars as expected budgetary support.

Mr Baah-Wiredu noted that the WB had since 2001 given Ghana a total of 940 million dollars saying: "The contributions of the WB and other allied institutions had helped to stabilise the economy." From the year 2000 when the exchange rate of the cedi to the dollar rose by about a 100 per cent from around 3,700 cedis to more than 7,000 cedis, the rate has significantly stabilised.

The Minister observed that the cedi had also stabilised against the Euro and the Pound Sterling while inflation rate was at present fixed at 15.7 per cent following its shift to 17 per cent after the fuel price hikes.

He said The Ministry was working with the National Development Planning Commission (NDPC) to update the Ghana Poverty Reduction Strategy and also with the Ministries, Departments and Agencies (MDAs) to come out with the 2006 Budget in November 2005 adding that it formed part of activities the Ministry was currently undertaking.

Mr Dib, whose constituency of nations under the World Bank included Ghana, Pakistan, Morocco and Algeria, said his visit was to discuss development concerns with government officials and to share ideas. He said another priority area on his agenda was to discuss how the debt relief initiative would be implemented.

Mr Dib, whose current appointment took effect this year, denied that the programmes of the Bank required developing countries to lay off workers and said it was for the individual nations to determine what was best for their economy in its dealing with the WB.

The Executive Director, who arrived on Sunday, is scheduled to meet with the Senior Minister, Mr J. H. Mensah, President John Agyekum Kufuor and also visit the Achimota road construction site. He would be in the country for three days.

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