President of the African Development Bank Dr. Akinwumi Adesina is confident that next month the Bank’s board will approve an amount of US$100million meant to support the country’s budget.
According to Dr. Adesina, the support is the Bank’s way of asserting its confidence in the local economy, which he said has witnessed some hard times after the general slump in commodities’ prices on the world market.
Speaking in an interview in Accra, Dr. Adesina said: “The African development bank is expected to provide US$100million. I hope our board is considerate when the matter comes before them. The amount, which is a general budget support, will help government in some of its fiscal challenges”.
The expected release of the AfDB budget support will come as good news to government, particularly as it incurred donors’ wrath last year when more than US$700million was withheld due to some concerns donors raised about the economy’s management.
The deal between Ghana and the International Monetary Fund (IMF) has acted as a catalyst in ensuring that donor funds previously locked up are released to ease government’s fiscal constraints.
Minister of Finance Seth Terkper recently expressed confidence that the release of those funds by development partners will be instrumental in the economy’s turnaround. So far, the World Bank Group has committed about US$220million in general budget support as well as to other projects.
“The donor flows that dried-up have started flowing again. If there are any doubts in the minds of the sceptics, I think these agreements showing donor support as well as other inflows — such as a second tranche of IMF funds — should clear them,” he said.
The AfDB support
Earlier this month, the bank approved a US$120million corporate loan — the first private-sector investment in Ghana’s transport sector — to support the Ghana Airports Company Limited’s (GACL) capital investment programme.
The amount will see construction of a new terminal at Kotoka International Airport (KIA) and rehabilitation of other airports managed by GACL, including Kumasi, Tamale, Ho and Wa Airports.
A statement issued by the Bank said the total loan facility for the programme is US$400million to be financed with corporate loans from AfDB and other development financial institutions as well as commercial banks.
It said the programme will support the country’s ambition of modernising vital infrastructure through upgrading the airport to be a gateway for West Africa and a regional aviation hub.
The AfDB’s financing will play an important role by providing much-needed long-term finance, enforcing environmental and social standards, and working to enhance the project’s development impact.
The infrastructure nature of the programme is part of AfDB’s 10-Year Strategy as well as the Bank’s Country Strategy for Ghana, which focuses on improving infrastructure and integration into regional markets.