GOVERNMENT OF GHANA AND WORLD BANK SIGN $110 POVERTY REDUCTION AGREEMENT.

The Government of Ghana and the World Bank today signed the Poverty Reduction Support Credit –5 (PRSC-V) of $110 Million at the Ministry of Finance and Economic Planning Conference Room. Hon. Dr. A. Akoto Osei, Deputy Minister of Finance and Economic Planning and Mr. Matt Karlson, Country Director of the World Bank signed on behalf of the government and the World Bank respectively.

The PRSC is the instrument which the World Bank uses for direct budget support. This is the fifth in the series. The proceeds of the credit will be used to finance the 2007 budget in two ways: as foreign exchange to finance foreign expenditure and also shore up the country’s foreign exchange reserves on behalf of the country and, secondly for the financing of local expenditures arising out of the 2007 budget.

Speaking to the press, Mr. Matt Karlson, noted that the attainment of middle income status is not handed down nor is it achieved by pumping in more money into the economy but through hard work. It is about both behavioral and attituditional change as well as change in time management that can make the difference.

According to Mr. Matt Karlson, sustained efforts by the Government of Ghana, with the support of its development partners to reduce poverty and improve the standard of living of Ghanaians are showing very good results. These are evidenced in among other things; the reduction in the poverty levels from 52% in 1992 to 28.5% in 2005. Economic growth which averaged 4.5% from 1983 through 2000 has accelerated to 5.6% in 2004 and 6.2% in 2006. “The country is moving in the right direction, however there is still more to be done,” he further stated.

On his part, Hon. Anthony Akoto Osei, the Deputy Minister of Finance thanked the World Bank and all the committee members who worked tirelessly behind the scene to make the agreement possible. He commented that, to solve the economic problems in the country requires not only sound policy formulations, but also resources to carry them out. Dr. Osei noted that, the release of the PRSC-V is timely and will be used appropriately to achieve maximum benefit to all Ghanaians. He stated that negotiations for the PRSC VI are underway.

The terms and conditions of the facility is concessional with Standard IDA term. Repayment is for 30 years with a grace period of 10 years and a commitment fee of one-half of one per cent per annum, which may be waived at the discretion of IDA’s Board of Executive Directors.