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30.08.2005 Business & Finance

Ghana Signs PRSC With World Bank

Public Affairs Dept, Embassy of Ghana, Washington D.C

Third Poverty Reduction Support Credit Agreement Between Ghana And The World Bank Signed Ambassador Fritz Kwabena Poku, Ghana's envoy to the U.S, on behalf of the Government of Ghana, yesterday, signed the $125million dollars, Third Poverty Reduction Support Credit Agreement (PRSC) between Ghana and the World Bank in Washington D.C.

The agreement which is the First Bank FY06 operation in support of Ghana is critical for implementing the country's budget as planned and in supporting several policy reforms that underpin the implementation of Ghana's poverty reduction strategy.

In his remarks, Ambassador Poku expressed the country's gratitude to the World Bank and its team of experts for working diligently to bring the agreement to fruition.

He said, “as far as the Government of Ghana is concerned, it has nailed its colors to the mast of prudent economic management” adding that the Government of President Kufuor has proved in no uncertain terms, that it has broken the jinx of past governments which during election years, indulged in non-budgetary and inflationary expenditure.

This Government, Ambassador Poku said, will stay the course of maintaining a stable macro-economic environment, even at the risk of incurring political costs; hence the Government should be given credit for fulfilling its commitment to the deregulation of the petroleum sector.

Ambassador Poku explained that the implementation of a new automatic adjustment mechanism to price petroleum products has been undertaken and thus the Petroleum Deregulation Bill has successfully been passed by Parliament and an independent National Petroleum Authority is set up to monitor the pricing of petroleum products.

This has however, allowed the Government to free itself from the burden of providing destabilizing subsidies to the sector.

On the strength of our performance, the Ambassador said, the Government of Ghana expect that the Bank will continue to support the country in ensuring predictability of funding in budget support operations, since predictability and timeous disbursement are essential for ensuring macro-economic stability and the implementation of the Poverty Reduction Strategy.

He said even though, the Multi-Donor Budgetary Support framework, set up to facilitate and accelerate budgetary support inflows has achieved substantially its purposes, there is still room for improvement adding that “ the Minister of Finance, few weeks ago, expressed some apprehension about the slow pace of these inflows this current year.

Ambassador Poku, therefore urged the Bank to work further on this mechanism to optimize its efficiency and hoped that the next PRSC will follow in few months to ensure timely support to the 2006 budget, which the Government intends to present to Parliament in November and thus to deepen harmonization with other development partners.