Donors haven’t withdrawn support for Ghana – Gov’t

The Government of Ghana has denied reports that the country’s international partners have withdrawn donor support for the West African country.

“I have not heard the donors officially say they are withdrawing; I’ve not heard that”, information and media relations Minister, Mahama Ayariga said on Saturday.

According to him, “they haven’t really withdrawn, just that they haven’t disbursed also”.

He nonetheless conceded that his tracking of donor contributions shows that “a significant amount of money and the last time I checked, not less than US$188 Million hadn’t been disbursed and other support programmes coming from them, but there’s no official - I mean, not to my knowledge - statement that [they have withdrawn support]”.

Mr. Mahama also admitted that the Multi-donor budget support group which, contributes about 50 percent financial support to Ghana’s annual budget, has issues with the country’s huge expenditure of about 74 percent of revenue, on public sector wages.

“…It is true that they are concerned about our wage bill…the way that it has risen astronomically in recent times, and if you looked at the compensation to employees to GDP ratio in the sub-region, we are the highest...the last time we checked with the arrears etc, in 2012 alone, we had spent in excess of 73 percent of earmarked tax revenue for payment of compensation of employees”, he explained.

According to him, the other major concern of the donors is in connection with Ghana’s energy crisis and inefficiencies in the sector, which forced the Government to spend a lot more on energy, and also plunged industry into the abyss.

He said: “There are a number of issues over which the development partners and the Government clearly have some fundamental disagreements…but you see, they are not issues that point to an inefficient Government. They are issues that point to disagreement over how to manage your economy”.

The donors reached a decision to withhold their support following their annual review of the country’s economy.

They came to a conclusion that there were disparities between the visions of the two parties and thus, decided to suspend their support.

Economist and Executive Director of the Centre for Policy Analysis, Dr. Joe Abbey, told XYZ News on Wednesday, October 2, 2013 that the donors “have not been able to bridge a little bit of a gap in a shared vision, a shared assessment of where we are and where we are going and so they have not reached so called closure”.

He said: “…The result is that these donors are not disbursing some of the aid to Ghana because they have not been able to come to the same page and so there is the need to resolve whatever differences in perceptions between the government and the donors as to where we are, first of all, so that the donors will see their way clear to be able to disburse”.

He suggested that Ghana institutes a two-year homegrown programme with clearly spelt our objectives, which the donors must be aware of, toward resolving the impasse.

Dr. Abbey warned of dire consequences for Ghana’s budgetary outcome for the coming years if the Government fails to resolve the impasse with the Donors.

“We need to…solve any problems that are lingering between us and the donors because if we don’t solve that, the budgetary outcome will be much much worse than we want and people who don’t know and sitting outside will form an even worse view of us than they already have”, he observed.

He explained that one of the consequences could be a downward rating of Ghana’s economy by international ratings agencies whose “views matter in financial markets” as far as borrowing is concerned “whether they are wrong or right”.

Speaking on Joy FM’s news analysis programme Newsfile on Saturday, Mr. Ayariga said the Government is looking at ways to close ranks with the Donors so that they will resume the aid disbursement.