The Ministry of Finance has disclosed that Ghana is likely to lose 3.8 billion dollars in World Bank financing over the next five to six years if President Akufo-Addo signs the Anti-LGBTQ Bill into law.
According to the Finance Ministry, for 2024 Ghana will lose 600 million dollars in Budget support and 250 million dollars for the Financial Stability Fund, which will negatively impact Ghana’s foreign exchange reserves and exchange rate stability.
The statement said the potential loss of these financial resources creates a financing gap in the 2024 budget that must be addressed either through a significant reduction in expenditures or additional domestic revenue mobilisation.
The statement further said that failing this, the government’s ability to achieve the targets in the 2024 Budget will be undermined and the IMF-ECF Programme will be derailed.
Hence, the non-disbursement of the Budget Support from the World Bank will derail the IMF programme. This will in turn trigger a market reaction which will affect the stability of the exchange rate.
The African Development Bank, on the other hand, has indicated that the passage of the bill will not have any adverse impact on cooperation with Ghana. However, after several discussions with officials from the German Government, the finance ministry officials have been informed that the German Government is against the passage of the Bill.
Given Germany’s relatively strong influence in the European Union and the Official Creditor Committee, there is a need to manage the relationship to forestall a strong negative reaction.
Source: Citi
