Relook interest rates on loans to Africa – Ofori-Atta appeals
Finance Minister Ken Ofori-Atta has appealed for development partners who lend to African countries to re-consider the interest rates slapped on loans meant for infrastructural development in poor countries.
Mr. Ofori-Atta argued that harsh conditions in recent times, particularly the COVID-19 pandemic and invasion of Ukraine by Russia, have made it difficult for developing countries in Africa to pursue planned policies aimed at poverty alleviation.
He pointed out that, for example, debt obligations in foreign currencies have also compounded the plight of countries in Africa due to the surge in global interest rates; a situation that must be holistically addressed to create balance.
“Really, if you look at the debt stock now across the continent, it’s not looking as expected. Just last year [2021] the debt to GDP of Ghana was somewhere around 65 percent, and now this year [2022] it has jumped to 81 percent of GDP; and really, the foreign component is the challenge,” Mr. Ofori-Atta said to a European Union (EU) delegation that signed two separate deals with government totalling €247.7million.
Citing the invasion of Ukraine as a typical example that may affect the growth of agriculture in Ghana, Mr. Ofori-Atta urged the EU delegation to take a second look at fertiliser distribution across the world, since Ghana heavily relies on the product from Ukraine and Russia.
“The fertiliser issue is a major challenge that must be really looked at, because it will have serious impacts on agriculture from this part of the world,” he said.
EU-Ghana sign €203 million deal
As part of the visit, the EU, led by the European Commissioner for International Partnerships, Ms. Jutta Urpilainen. signed a €203million financial agreement with Ghana’s Finance Minister under the Multiannual Indicative Programme for Ghana for 2021-2027.
The new programme falls under the EU’s new Global Europe financing instrument to support green growth jobs, smart and sustainable cities, as well as good governance and security.
According to the EU delegation, the priorities were jointly determined with Team Europe partners – in close consultation with Ghanaian authorities, civil society and other relevant stakeholders.
“Ghana is a strategic partner for the EU in West Africa, as an economic powerhouse and an anchor of stability in the region. The EU sees concrete opportunities to deepen our partnership by working together on Ghana’s green and digital transition, security situation and multilateral level by promoting our common values,” Ms. Urpilainen said.
She is hopeful the EU Global Gateway strategy will serve as one of the frameworks for the Ghana-EU partnership to boost smart, clean as well as secure connections for quality investment in Africa.
She explained that the Multiannual Indicative Programme will take the form of a Joint Programming for Ghana between 2021 and 2027.
Ghana to receive €44.7million
As part of measures to boost agricultural production in Ghana, the EU also signed a separate deal of €44.7million with the government of Ghana to build irrigation dams in Northern Ghana, with support from France under the Agricultural Water Management Project (AWMP).
The fund is expected to finance rehabilitation and construction of 15 dams, 11 boreholes and nine pumping stations on the Black Volta.
The project will be supervised by the Ministry for Food and Agriculture, Agence Francaise Development (AFD) and Ghana Irrigation Development Authority.