July 22, 2022

Parliament Approved $750M Loan To Save Ghana From Bankruptcy

A report by the Finance Committee of Parliament has revealed that Ghana would have drowned in insolvency had Parliament disapproved of the $750 million dollars Loan Facility Agreement between the government of Ghana and the African Export-Import Bank (AfreximBank).

The purpose of the facility, which the government says will be used to undertake eleven different projects across the country, is to also shore up the reserves of the Bank of Ghana which had diminished from $9 billion to $3 billion, the report said.

Without it, the Bank of Ghana would have defaulted on its international commitments, according to the committee report.

It noted that Ghana has over the past years financed its budget with proceeds from the International capital market and domestic bonds, however, the international capital market is not available to the country due to International rating agencies’ downgrading of Ghana’s credit rating.

Additionally, the domestic bonds did not yield the desired result, plus, the rising inflation, rising interest rate, cedi depreciation, and increasing energy cost saddling Ghana.

But for the loan, the reserves of the Bank of Ghana would have been exhausted in a few months, the report noted.

On July 20, 2022, the Parliament of Ghana approved the facility to finance eleven projects including the Ofankor-Nsawam road; Ejisu-Konongo road, completion of the Nsawan Apedwa road project; Suame Interchange and Local Road Network Project; completion of Flower Pot Interchange at Legon; Completion of Sofoline Interchange, Construction of Kwabenya-Peduase Road Project, the completion of Eastern Corridor Lots 5 and 6; completion of Enkyikrom-Adawso road project; Purchase of rolling stock and spare parts, and the construction of Stadia for All Africa Games.

Source: opemsuo.com/Hajara Fuseini

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