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General News Thu, 21 Nov 2002

Ghana to forgo IFC loan

Information gathered by newsinghana indicates that in the wake of the controversy that surrounds the $1 billion IFC loan, the president, John Kufuor who himself was rather optimistic of the prospects of the loan seems to have decided against it now.

Although no pronouncements have been made on the loan at the time of filing this report, our information is that, the government may not after all go for it.

Finance Minister, Yaw Osafo-Maafo (MP) said in Parliament that the government has not yet given out the sovereignty guarantee for the loan and it is still conducting the necessary due diligence.

Meanwhile, the Daily Accra Mail says it has been picking hints from government sources that though there is quiet optimism that generally the government is performing creditably, two issues are dogging the government, but especially, the president who as the chief executive would sooner or later have to pronounce on them.

The first is the controversial IFC loan and the second, increases in the prices of petroleum products.

In his Sessional address early this year, the president identified infrastructure development among his five core priority areas. Due to Ghana?s HIPC position, the funds for such programmes would have to be sourced from less traditional sources, hence the recourse to the financial markets.

From the very first time the issue was mooted, it was greeted with controversy, and by the time it made it to the floor of Parliament, it had become a hot potato. In Parliament, it was debated purely along partisan lines and though the House passed it, the opposition still remained skeptical.

There are laid down processes to follow when contracting international loans to ensure that the proper due diligence is done and all bases are covered. Experts agree that the entity that is brokering the loan per se should not be the problem, for after all, ?it is he or they who know where the money is that can lead you to it?.

Information gathered by newsinghana indicates that in the wake of the controversy that surrounds the $1 billion IFC loan, the president, John Kufuor who himself was rather optimistic of the prospects of the loan seems to have decided against it now.

Although no pronouncements have been made on the loan at the time of filing this report, our information is that, the government may not after all go for it.

Finance Minister, Yaw Osafo-Maafo (MP) said in Parliament that the government has not yet given out the sovereignty guarantee for the loan and it is still conducting the necessary due diligence.

Meanwhile, the Daily Accra Mail says it has been picking hints from government sources that though there is quiet optimism that generally the government is performing creditably, two issues are dogging the government, but especially, the president who as the chief executive would sooner or later have to pronounce on them.

The first is the controversial IFC loan and the second, increases in the prices of petroleum products.

In his Sessional address early this year, the president identified infrastructure development among his five core priority areas. Due to Ghana?s HIPC position, the funds for such programmes would have to be sourced from less traditional sources, hence the recourse to the financial markets.

From the very first time the issue was mooted, it was greeted with controversy, and by the time it made it to the floor of Parliament, it had become a hot potato. In Parliament, it was debated purely along partisan lines and though the House passed it, the opposition still remained skeptical.

There are laid down processes to follow when contracting international loans to ensure that the proper due diligence is done and all bases are covered. Experts agree that the entity that is brokering the loan per se should not be the problem, for after all, ?it is he or they who know where the money is that can lead you to it?.

Source: Newsinghana
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