The World Bank Country Director(Ghana), Pierre Frank Laporte has highlighted the challenges that have forced Ghana into a situation where the country is now seeking support from the International Monetary Fund (IMF).
He referred to the impact of the Covid-19 which he said has resulted in the difficult environment for businesses, as well as spillovers from other sectors of the economy especially the energy sector.
Speaking in an interview with TV3’s Paa Kwesi Asare on the Business Focus, Mr Laporte indicated that losses in the energy sector are compounding the challenges.
“The big issue has been on the fiscal side. Before the current crisis happened, we observed certain challenges on the budget side that really has been the area more hit by everything. Also where actions are required now to deal with them.
“For instance, on the revenue side we have always been saying that this is an area where Ghana should do better. We are encouraged by the fact that this should be one of the areas for potential programme and support from the World Bank. The problem is fiscal, not just revenue.
“The problem is that there are also spillovers from other sectors . For instance, the energy sector. There is about one billion dollars going to the energy sector because of losses. The sector itself is not financial viable and to keep it going you have to subsidize.
“Actions are required. Of course with Covid, the general business environment is been a bit more difficult.”
Mr Laporte also said Ghana is likely to receive about 600 million dollars as balance of payment support for next year’s budget.
“If Ghana is able to meet all the criteria and is going to get a budget support from the World Bank, how much are we looking at” asked Paa Kwesi Asare.
In answer, Mr Laporte said “Normally, there is a hard rule and soft rule, we can give around 30 to 40 per cent of the country’s budget support and for Ghana we are looking around $600million. Ghana’s envelope for the next three years is $1.5billion,” he said.
By Laud Nartey|3news.com|Ghana