No Parliamentary Approval For IDA Loan

The government lost a vote in Parliament, when the House failed to pass a resolution for a loan of 111 million dollars that it was contracting from the International Development Association to support the third Economic Recovery Support Operations (ESO III).

Sixty-seven voted in favour while 63 voted against. The resolution needed 100 votes to pass.

The Minority's sudden change of heart not to support the Majority in approving the loan confirmed earlier speculations that they were against some of the conditions attached to loan.

According to a report released by the Finance Committee on the loan, the credit, which is payable in 40 years, was to be disbursed as soon as the conditions attached were met by the government of Ghana.

The eight conditions included an increase in the ex-refinery price for petroleum products to achieve cost recovery and reduce the strain on government expenditure.

"Increase electricity and water tariffs to cover the operating costs of Electricity Company of Ghana (ECG) and Ghana Water Company Limited (GWCL)."

According to the report, the Public Utility Regulatory Commission (PURC) was supposed to furnish government and the IDA with its formulation of a transitional plan to adjust electricity tariffs to reach economic levels by the end of 2002 and an automatic mechanism for electricity tariffs to adjust to the exchange rate of the cedi and oil import price.

Cabinet was supposed to approve the re-launch of the divestiture process for Ghana Commercial Bank (GCB) and publish notices in the local and international media requesting expression of interest from potential buyers interested in the purchase of the remaining shares of the Bank.

"Government sends out a request for proposals to potential transaction advisors for the divestiture of ECG."

Another condition was that the government was to commence payment of compensation to cocoa farmers for losses they incurred during the 2000/2001 cocoa purchasing season in order to maintain the farmers' share of the producer price of cocoa at a price not less than 65 per cent of the FOB export price.

The report states that government was to issue cocoa export licences to eligible companies.

Mr Alban Bagbin, the Minority Leader, has expressed satisfaction on the outcome of voting.

"Although they (Majority) have another chance of bringing the resolution to the floor of Parliament. We have made our point that the conditions were too harsh" he told the GNA.

Meanwhile, Mr. J. H. Mensah, the Majority Leader, said the resolution would be re-tabled on Friday "so that members would go on holidays with some respectable considerations".