Despite spirited opposition from the Minority, Parliament has given the green light for the government to secure a $300 million loan from the International Development Association (IDA) to fund the 2024 budget.
The decision, made after a heated debate on the floor of the House, comes with calls for the government to address concerns regarding the country’s tax exemptions regime, which some critics argue is leading to an over-reliance on loans that could compromise Ghana’s economic future.
Finance Minister, Dr. Mohammed Amin Adam, sought to assuage the fears of the Minority Members of Parliament during the deliberations.
He clarified that the loan from the IDA is a concessional facility with favorable terms, emphasizing a 25-year repayment period, a five-year grace period, and a low-interest rate of approximately 1.25 percent. He also noted that the loan includes a significant grant element of 26 percent.
“This is not an IMF facility, it is a World Bank facility,” Dr. Adam emphasized. “It is budget support aimed at financing various projects and programs outlined in the 2024 budget, which this same house has already approved.”
Addressing concerns about the tax exemptions regime, Dr. Adam pledged to review and rationalize the system within two weeks. “I want to assure them [the Minority] that I will review these exemptions. I will rationalize them, and I’ll report back to Parliament in two weeks,” he stated. “I hope that when I return, honorable members will support me in whatever rationalization we undertake.”
