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10.11.2005 Business & Finance

BUDGET: Debt relief is 2,277 billion cedis

By GNA
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Accra, Nov. 10, GNA - Total Highly Indebted Poor Countries (HIPC) relief expected next year is about 2,277.5 billion cedis out of which 455.5 billion cedis representing 20 per cent of the expected amount would be used to reduce domestic debt.

The rest, amounting to 1,822 billion cedis would be approved by Parliament to be given to the Ministries, Departments and Agencies (MDAs) and Metropolitan, Municipal and District Assemblies (MDAs) to implement poverty reduction related programmes and projects, the Minister of Finance and Economic Planning, Mr Kwadwo Baah-Wiredu announced on Thursday in the government's 2006 budget and financial statement.

The Finance Minister said the 2006 poverty reduction expenditures would include 630 billion cedis from the National Health Insurance Fund and 350 billion cedis as a lifeline for consumers of electricity and as a safety net for protection of the poor against negative effects of the petroleum price deregulation.

He said total estimated debt relief under the Highly Indebted Poor Countries (HIPC) Initiative for 2005 was 1,992.9 billion cedis. Out of this amount the Government utilised 398.6 billion cedis, representing 20 per cent for domestic debt payment. The balance of 1,594.4 billion cedis was disbursed to Ministries, Departments and Agencies and Metropolitan, Municipal and District Assemblies for the implementation of priority poverty reduction and growth enhancing programmes and projects.

Mr Baah-Wiredu said by the end of September a total of 1,265.5 billion cedis of HIPC resources had been disbursed. He said in 2005, the Government continued to benefit from reaching the HIPC Completion Point in 2004 through increased levels of debt relief for the implementation of poverty related programmes and projects.

The Finance Minister said consistent with the President's State of the Nation Address, preference in terms of the allocation of HIPC resources was given to the three priority broad areas of human resource development, private sector development linked up to modernised agriculture, improved infrastructure and good governance. He said of the total amount disbursed to MDAs in 2005, about 35.0 per cent was spent on human resource development, 57.0 per cent on private sector development, eight per cent on good governance and three per cent on other projects.

Mr Baah-Wiredu said to achieve the targets of the Ghana Poverty Reduction Strategy (GPRS) II for 2006, Government had allocated 9,002 billion cedis representing 32.68 per cent of total Government expenditure to implement poverty reduction programmes and projects in the three priority development areas of the Government. The programmes and projects will be consistent with the GPRS II priorities.

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