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General News of Saturday, 19 July 2014

Source: citifmonline

Gov’t not prepared to transform economy – Franklin Cudjoe

The Executive Director of IMANI Ghana, Franklin Cudjoe, has described government’s decision to halve the $3 billion China Development Bank (CDB) loan as a signifies government’s unpreparedness to transform the economy.

According to Mr. Cudjoe,” the fact that we have to change the fundamentals of making projections, going for loans, knowing the profitability and viability of the project is an attestation of the fact that we have never been ready to do serious business with the economy.”

The CDB agreed to provide Ghana with a loan of $3 billion for a package of infrastructural projects.

CDB and Ghana signed the loan on December 16, 2011.

The Minister of Finance, Mr. Seth Terkper in his presentation on the 2014 mid-year review budget last Wednesday, however, announced the decision to halve the $3 billion loan to $1.5 billion

The announcement has generated public outrage as some believe the decision could halt some of the infrastructural projects government intended to embark on with the full loan.

Speaking on Citi FM’s News Analysis Programme, The Big Issue, Mr. Cudjoe condemned government’s decision to sign onto the loan in the first place, describing it as “chicken change.”

Mr. Cudjoe believes Ghana’s “retrogressive” and “discordant” forex rules partly compelled government to halve the loan.

“Unfortunately, we are in a serious bind. It was clear that if we had discordant and retrogressive forex rules, government’s projections from day one was going to be affected.”

“Government had forgotten that all the projections that were being made were timeous and were related to the time value of money and so if you were already having an economy that was not so productive, you don’t kill it further by having these forex rules,” Mr. Cudjoe opined.

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