Budget Support operations. This means that the total disbursements for Ghana over the next three-year period could reach US$1.35 billion.
The Minis ter for Finance and Economic Planning, Hon Dr. Kwabena Duffuor explained to the Committee that the US$300.00 million facility, if approved, would be withdrawn in two equal instalments of US$150.00 million each.
First tranche release conditions set by the Government of Ghana and agreed to by the IDA include inter alia that Government
reconstitutes the Boards of Volta River Authority (VRA), Electricity Company of Ghana (ECG), Ghana National Petroleum Corporation (GNPC), Tema Oil Refinery (TOR) and the Public Utilities Regulatory Commission (PURC);
opens a Treasury Single Account (TSA) at the Bank of Ghana and identifiy the MDAs accounts to be connected to the account;
implements a net hiring freeze in the public sector (excluding the absorption of trainees in education and health); and
increases the number of households covered by the “Livel ihood Empowerment Against Poverty (LEAP)” Programme since June
ensures that at least 80 per cent of total number of procurement contracts processed in 2008 by MDAs covered in the PPA sample have followed procurement methods and procedures in accordance with the Public Procurement Act; and
begin regular publication of comprehensive and detai led quarterly fiscal outturns with no more than one quarter lag.
Actions to be taken by Government before the second tranche would be released include among others that Government,
submits to Parliament a Freedom of Information Bill and if approved, adopt a related implementation plan including a budget for its imple- mentation;
appoints a Minister of State to be responsible for Public Sector Reforms and to eliminate ghost workers from Ghana Education Service (GES) payroll;
completes consultations with stakeholders on draft legislation concerning the proposed Ghana Petroleum Authority and the oil and gas regime, and for Cabinet to approve such draft taking into account the results of the consultations; and
revise the classification of pro-poor public expenditures based on an assessment of their effective impact on poverty, for use in the 2010 Budget;
takes contingency fiscal measures, once the Public Wage Bill for 2009 has been established, to correct any deviations in respect of the fiscal deficit and the share of pro-poor expenditure targets set forth in the 2009 Budget; and
completes through the Ministry of Energy, consultations with stakeholders on an electricity sector financial recovery plan and approve
the said plan through Cabinet.
The Minister for Finance and Economic Planning informed the Committee that the Government's macro-economic target for 2009 is to achieve a fiscal deficit not exceeding 9.4 per cent of GDP and that Government is committed to using innovative means including revenue enhancement to achieve that target.
Expec ted outcomes f rom th is US$300.00 million package include protected pro-poor expenditure as a ratio of actual over budgeted pro-poor expenditure, enforced net hiring freeze in the public sector excluding trainees in education and health, reduced public subsidies to the operations of the energy sector as a percentage of GDP and expansion in the number of regular LEAP beneficiaries.
The technical team from the Ministry of Finance and Economic Planning informed the Committee that about three thousand (3,000) ghost names were removed from the health sector payroll last year. Currently, there is a headcount underway in the Ghana Education Service (GES) to help weed out ghost names.
The Committee was assured that the National Youth Employment Programme (NYEP) would not necessarily be affected by the net hiring freeze since jobs under the Programme are non-established posts.
Members admonished the Ministry to be wary of subvented institutions like the universities which often recruit without recourse to central government.
Some members were not happy that the net hiring freeze condition would make it difficult for young graduates to join the public sector since the public sector in Ghana has proven to be the biggest employer. The technical team however
explained to the Committee that the net hiring freeze is only meant to ensure that MDAs stay within their staff ceilings and that recruitments could be made to replace staff who would leave or retire.
The Committee noted that the expected outcomes are meant to be achieved in about three years after the necessary prior actions have been implemented.
Excluded expenditure or items that the credit funds may not be applied towards include alcoholic beverages, tobacco, radioactive and associated materials, pearls, precious and semi-precious stones whether worked or unworked, nuclear reactors and parts thereof, tobacco processing machinery, and jewelry of gold, silver or platinum. Also excluded are expenditure on goods intended for military or paramilitary purposes or for luxury consumption.
The Committee has critically examined the Agreement and found the terms to be highly concessional. The programme for which the loan is being contracted was also found to be very beneficial to the nation's developmental needs.
The Committee, therefore, respectfully recommends to the House to adopt this Report and approve by Resolution, the Economic Governance and Poverty Reduction Credit (EGPRC) Agreement between the Government of the Republic of Ghana and the International Development Association (IDA) for an amount of one hundred and ninety-three million, eight hundred thousand Special Drawing Rights (SDR193.8 million) [equivalent US$300.00 million] for General Budget Support in accordance with article 181 of the Constitution, sections 3 and 7 of the Loans Act, 1970 (Act 335) and Standing Orders of the House.
Mr. Ignatius Baffour Awuah (NPP
- Sunyani West): Thank you Madam Speaker, for giving me the opportunity to second the motion.
But Madam Speaker, before I even move into that, I just want to say that even though the Minister for Finance and Economic Planning has just indicated the importance and the urgency of this particular motion, a clear observation of membership of this House shows that we those on the Minority side outnumber those on the Majority side, meaning that we are attaching more importance to the motion than those on the Majority side.
Madam Speaker, at the time the motion was moved, we on the Minority side were 43 and those on the Majority side were 25. The number has just moved up to 33 after the bell was rung.
Madam Speaker, I am only bringing this up to let everybody know that we on the Minority side are interested in getting Ghana to move forward rather than those on the Majority side.
Madam Speaker, in seconding the motion, I would want to say that during the reading of this year's Budget, one thing became evident and that was, there was a financing gap. This financing gap which was observed really needed to be filled and one of the ways that this financing gap can be filled is to go for a loan to support the budget programme. This loan can either be taken domestically or externally.
By going for a domestic loan, Madam Speaker, the Government will then be competing with the private sector for funds locally and in that way dwarfing
the private sector. So we on the Minority side agree with Government for going for an external loan, more especially, from the World Bank.
But Madam Speaker, in reading newspaper headlines, one gets the impression that this loan we are taking from the World Bank is free money. But Madam Speaker, I want to put it on record that this is a loan and it is not free and I want the whole country to know that it is not free money.
Madam Speaker, as the Chairman of the Finance Committee indicated, the money is going to attract interest and we are going to repay this money within a stipulated time. So, as I said, it is not free money; it is not a gift money to Ghana; it is money that we are going to pay back. If we are going to pay back, then indeed, we must also make sure that this money is used judiciously to enhance the well-being of the people of Ghana.
Madam Speaker, apart from it not being free, there are some triggers which Ghanaians need to be aware of. By triggers, Madam Speaker, I mean there are conditionalities attached to the taking of the loan. The loan, as we have been told, is going to be released on two tranches. The first tranche which will be due in July, Madam Speaker, the conditionalities are not that stringent. But with the second tranche which will be released in September, Madam Speaker, if you would permit me, I will mention some of the triggers which we will have to meet.
Madam Speaker, the World Bank is requesting the Government to designate a leader in Government to be in charge of Public Sector Reforms. Madam Speaker, this means that Government is to appoint a Minister responsible for Public Sector Reforms. His Excellency the President