International donors withdraw support for Ghana because of ‘terrible’ economy

• Posted on October 3, 2013
• by Nana Kwesi Coomson
• Comment

Some international donors have withdrawn their support for Ghana.

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 74 percent of revenue, on public sector wages, as well as the unstable local currency.

The decision by the donors was reached after their annual review of Ghana’s economy.

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

Economist and Executive Director of the Centre for Policy Analysis, Dr. Joe Abbey, has told XYZ News 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”.

According to Dr. Abbey, “…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 suggests that Ghana institutes a homegrown two-year programme with clearly spelt our objectives, which the donors must be aware of, toward resolving the impasse.

Dr. Abbey warns 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”.

radioxyz