Parliament approves $300m loan following Amin Adam’s intervention over $449m tax waiver

Parliament has approved a $300 million loan from the World Bank, aimed at supporting the First Resilient Recovery Development Policy Financing.

This funding plays a pivotal role in facilitating the government’s implementation of outlined policies in the 2024 Budget.

Initially met with resistance opposition from the minority, who conditioned their support on the government withdrawing its request for a tax waiver exceeding $449 million, the loan eventually garnered approval.

Finance Minister Mohammed Amin Adam assured the minority of his commitment to revisit the tax exemption requests within two weeks, which ultimately led to the loan’s approval.

Addressing the house, the Finance Minister said “Mr Speaker, let me take this opportunity to clarify a few issues. First of all, this is not an IMF facility, it is a World Bank facility. It is a concessional facility for 25 years. The payment period has a grace period of five years interest of about 1.25 percent and it has a grand element of 26%.

“It is concessional and this house is familiar with that concessional facilities. Secondly, it is a budget support. This same house approved the financing for the 2024 budget, a total financing of 61 billion. And this is one of the facilities that we are pursuing to finance the 2024 budget. And therefore as we already know, the 2024 budget, through this house, allocated resources to different projects and programmes for the year.

“I want to assure them [Minority] that I will take a look at these exemptions. I will rationalize it, I’ll review it and I’ll come back in two weeks to report to parliament and I hope that when I come Honourable Members will support me in whatever rationalization we are going to do,” he said.

In January this year, the World Bank approved a $300 million Development Policy Operation for Ghana.

The First Resilient Recovery Development Policy Financing, according to the Bank is a critical contribution by its International Development Association (IDA) to help Ghana’s economic recovery and support the country’s resilient and inclusive growth.

Its objectives are to restore fiscal sustainability; support financial sector stability and private sector development; improve energy sector financial discipline and strengthen social and climate resilience.

Specific reforms supported by this financing series include strengthening domestic revenue mobilization, controlling expenditures, safeguarding financial sector stability, removing barriers to private investment, setting the energy sector on a sounder financial and operational footing, strengthening the country’s social protection system, and mainstreaming climate adaptation and mitigation across policies.