The 150 Million Budget is approved by the Board executive directors of The World Bank for the betterment of Ghana’s economy on Wednesday 8 July, 2015.
The purpose of this credit from the International Development Association is to support the Growth, development, policy, financing and Macroeconomic stability, these first financing operations supposed to help the government in stabilizing the economy by introducing effective policies.
The Board approved the landmark policy of IDA, that is they will spend up to US 400 million dollars for the betterment of Ghanaian economy and which will use as external debt in future.
Task Team Leader of World bank, Santiago Herrera, said that this first proposed credit will enhance the economic stability and the productivity of public Spending.
After a long period of high growth, now Ghana has to face the instability of the economy resulted in low growth and twin deficits.
In 2012 the GDP rate was 14 percent, but after hitting the highest rate now the Ghana’s GDP rate is collapsed at 4 percent because Ghana faced a lot of domestic and external problems, so at the end result the Cedi depreciated, economy GDP decreases, Interest rate increased and public debt also increased.
The major problem in balancing the economy is the level of government debt because it is at 65 percent of GDP in 2014
Government debt is the main barrier to the economy’s development and stabilization.
Seth Terkper, Ghana’s Finance Minister stated in a recent address to the parliament, that the measures which were approved in the budget of 2015 have been intensifying the implementation by government.
The main purpose of the address was to describe the low levels of profits and high level of debts as well as to keep the borrowing on the level which was approved by the budget in 2015.
It was a horrible task for public because of the high rate of interest and the low currency rate, on the other hand the debt managers were try to promote short terms loans so that they can avoid to commit with future budgets.
Consequently the composition of debt became a risk source. It was cleared by trapping the debt managers that organization of IDA has a purpose.
The resources allocated to Ghana were US$100 million of IDA. , World Bank Country Director for Ghana, Yusupha B. Crookes stated that they will help Ghana to solve their problems. Further it was cleared that the banks were help Livelihood Empowerment against Poverty (LEAP) program which provides cash to the poor families of Ghana.
According to some new facilities, about 350,000 poor households would be provided by transfer of cash in 2017.
In 1960 the International development association (IDA) was establish to help the poor countries of world and provide them loans without interest rate for many projects.
Although the main purpose of IDA is to support poor countries and raise their economic stability as well as to improve the lives of poor people.
77 poorest countries are supporting by IDA from which 39 are in Africa. It brings a positive change in the lives of people who earned $2 per day. In 112 countries IDA has supported work for development from 1960’s.
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