Ghana free from IMF by October

The Statesman newspaper says it has information that Ghana, like the United Kingdom and several other members of the IMF will no longer receive direct financial aid from the Bretton Woods Institution.

The good news is that the country, now armed with favourable credit ratings, will now be free to go to the international money market to fill in the deep craters in funding our nation’s development.

The country’s Finance and Economic Planning Minister, Kwadwo Baah-Wiredu highlighted the seriousness of the situation when he told the media in Ghana that government needs 80 trillion cedis (8.8 billion dollars) to fund its projects this year. But, in the end, the 2006 budget could only make provision for 39 trillion cedis, leaving a much bigger funding gap of 41 trillion cedis.

Mr. Baah-Wiredu said not even half of the sum total needs and requests from the various Ministries could be met by a government that seeks to accelerate growth and attain middle-income country status by 2015.

“With this little money we could not cater for all our needs as a country, and we could not overtax our people also. So we still need the assistance of other nations like Belgium,” he said.

Giving the breakdown, Mr. Baah-Wiredu said roads and railways; water and telecommunication sectors all need one billion dollars each for expansion and other works while the energy sector, involving Volta River Authority and Electricity Company of Ghana require two billion dollars to effectively provide the needed services to the people.

The breakdown of the figures are that 26 trillion cedis is expected to be raised internally this year mainly from taxes, with 7 trillion cedis being grants from Ghana’s development partners and 6 trillion cedis as loans.

According to the paper, the Finance Minister said some opportunities are beckoning to fill up such a recurring funding gap, like the 41 trillion cedis. Ghana’s IMF program puts a serious check on the country’s maneuverability in contracting credit beyond the usual bilateral and multilateral arrangements.