Ghana Will Pay Back $156m World Bank Loan

The Chairman of the Finance Committee in Parliament, James Klutse Avedzi says although the Finance Ministry has put a moratorium on acquiring new loans, the $156 million loan from the World Bank is an exception.

This follows Cabinet’s approval of a proposed credit of $156 million from the World Bank’s International Development Association to finance the construction of Community Day Senior High Schools (SHS) across the country.

Government in a bid to ensure economic stability, the Finance Ministry put a moratorium on the award of new contracts and contracting new loans excluding loans and contracts already in the pipeline.

Defending the breach of the order given by the Ministry, Mr. Avedzi stated that the $156 million facility is essential to the development and growth of the nation.

According to him, although there is a moratorium on the acquisition of new loans, “government would have to allow some contingencies on some loans that are critical.”

He said the loan falls under the pipeline loan and it can therefore not be considered a new loan.

The money will be used by the government to construct 23 new Senior High Schools (SHS), 50 new rehabilitation works, support 75 low performing SHS and provide scholarships for 10, 000 students from low income families with emphasis on girls.

This is in fulfillment to a pledged made by the government during the 2012 campaign period to construct 200 news SHS and the provision of a progressively free SHS education in Ghana.

Regarding government’s debt to GDP (Gross Domestic Product) which has reached 50%, the Ketu North Constituency Legislator said Ghana has not exceeded the internationally accepted debt to GDP of 60% therefore; there is no cause for alarm.

He added that Ghana has the ability to pay back its loans because “no international body, no international institution will borrow you money if they know that you cannot even pay.”

Source: Citifmonline.com