Ghana to miss out on US$150m World Bank cash

Ghana is set to miss out on a much needed US$150m World Bank support to the 2009 annual budget, following its inability to keep faith with the Bank on agreed triggers for the release of the funds, Public Agenda has learned.

The triggers are: bringing the Freedom of Information, National Petroleum, and Petroleum Revenue management bills to parliament by October 2009 among others. These were negotiated and agreed upon when the Government sought a US$300m facility from the Bank to finance a whopping 13% budget deficit, the fallout out of an apparent slack in fiscal discipline in the last quarter of 2009, following the demise of Kwadwo Baah-Wiredu the then Minister of Finance and Economic Planning.

A source at the Bank's office in Accra has revealed deep concern among Bank officials over the slippage. “The Bank will not compromise on the Freedom of Information trigger, as well as the National Petroleum Regulation, and the Petroleum Revenue Management bills,” said the source.

The news has been hailed by civil society groups as positive. The Deputy Executive Director of the Centre for Public Interest Law, Augustine Niber concedes that insisting on the passage of the Freedom of Information Bill is a good thing for transparency and accountability in governance. In his view, such legislation is key to ensuring openness in Ghana's emerging petroleum sector. "We are with the Bank on this. Though we usually oppose the Bank on the issue of conditionalities, the point has to be made that, we are against those conditionalities that encroach on our national policy-making space, and not those which seek to make us do the right thing" said Ishmael Egyekumhene of Kite in a reaction to the news.

Recent announcements on Government's readiness to bring the national petroleum bill to parliament sometime soon is seen largely as a panic response to the Bank's threat of withholding the urgently needed cash. That in itself has also raised concerns among civil society groups, as it is feared that in the late rush to meet the deadline for the triggers, opportunities for civil society consultation and input could be short-circuited or missed entirely.

It is recalled that, in April 2008, following the discovery of oil in commercial quantities off the Western coast of Ghana, a national oil and development forum was held at the Ghana Institute of Management and Public Administration (GIMPA), as a precursor to developing a national oil and gas policy for Ghana. At the time of the political transition in January 2009, a draft oil and gas policy was ready and making the rounds in parlia-ment, the document was withdrawn by the current administration, along with a draft National Petroleum Regulatory Bill on the pretext of inadequate public consultation on the documents, and a felt need to review them of course providing opportunities for citizens' input

Concerns have lately been expressed by many including members of the current administration about the rather slow pace of the oil sector policy and legislative review. There is also an ever deepening perception that promises of openness in the governance processes in the oil sector are becoming nothing but mere rhetoric.

It is not exactly known what the impact of the World Bank's action would be, but certainly it will create some short-term fiscal challenges for the already troubled economy. Even if the Government is able to marshal extra resources from elsewhere to pull out of the short-term difficulties, a donor gang-up could compound matters for Ghana in the long term.