AfDB supports Ghana’s devt with $211.6m

“These approved projects are aligned with the Bank’s new Country Strategy Paper (CSP), which was approved in June 2012,” a statement issued by the bank in Accra yesterday said.

 It added that to date, the AfDB Group has financed 105 loans and grants in Ghana valued at approximately $3.755 billion. Projects funded by the bank primarily fall within the areas of transport, energy, agriculture, water and sanitation, education, health and multi-sector.

The statement said last year was a record year for the group’s engagement with the country, with the approval of four projects covering agriculture, education and the energy sectors by the Bank’s Board of Directors.

“The approved projects are aimed at assisting Ghana to achieve its development objectives as outlined in the country’s Shared Growth and Development Agenda,” the statement explained.

The announcement comes in the wake of revelations in the 2013 Budget statement which indicated that the economy recorded a fiscal deficit of about GH¢8.6 billion, equivalent to about 12 per cent of the total value of goods and services produced within the economy, otherwise known as Gross Domestic Product (GDP).

The government said a shortfall in grants of GH¢389.4 million (0.5 per cent of GDP) from development partners was one of the six reasons why the economy ran on a large deficit last year.

Indeed, foreign financing of the budget was GH¢1.63 billion against a target of GH¢1.91 billion, forcing the government to resort largely to domestic sources, amounting to GH¢7,018.0 million against the budget target of GH¢2.76 billion.

Some analysts have expressed worry about the large domestic financing, especially with over 60 per cent coming from the deposit money banks and 32 per cent from the central bank, an exercise that crowds out the private sector.

Checks by the Daily Graphic from the AfDB Ghana office could not establish how much of the committed funds had been disbursed.

The World Bank, early this year, reported that about $1.5 billion worth of loans and grants for various projects had not been disbursed due to technical capacity challenges from government agencies charged to work on the projects before disbursements could be effected.

 According to the Ghana office of the AfDB, a total of $76.5 million was approved for the third phase of the Rural Enterprises Programme (REP III), which aims at assisting the government to scale up the impact and outcome of the first two phases of the programme.

That, the AfDB said, was “in response to Ghana’s Shared Growth and Development Agenda (GSGDA) which focused on inclusive growth, youth employment, and women’s economic empowerment.”

 The government envisages REP III as part of its efforts to reduce poverty and improve living conditions in rural areas by promoting infrastructure, technologies and skills needed for private sector development.

It is expected to be implemented in 161 of the country’s 170 rural districts and is expected to create 100,000 new jobs, among other benefits.

The Ghana Institutional Support Programme (GISP), which is aimed at enhancing the capacity of selected institutions in both the private and public sectors, received $14.5 million funding.

It will also strengthen the non-tax revenue mobilisation framework, enhance the capacity of the Private Enterprise Foundation, National Board for Small Scale Industries and the Ghana Stock Exchange to support small and medium enterprises and enhance capacity in financial sector policy formulation.

The AfDB said it also financed the Development of Skills for Industry Project (DISP) with $120 million and the second phase of TICO power project with $60,000 for the expansion of the Takoradi Thermal Power Plant to a final capacity of 330 megawatts.

The CSP forms the basis of the African Development Bank Group’s operations in Ghana for the period 2012-2016 and it is based on the twin pillars of improving productivity in Ghanaian enterprises, and supporting economic and structural reforms aimed at improving the business environment.

Story by Samuel Doe Ablordeppey