Announcement of the Consultative Group for Ghana on December 12, 1984

FOR .IMMEDIATE -RELEASE World Bank 1818 H Street, N.W., Washington , D.C 20433 , U.S.A. PRESS RELEASE For Immediate Publication December 12, 1984 CONSULTATIVE GROUP FOR GHANA At the second meeting of the recently reconvened Consultative Group for Ghana, held in Paris on December 11 and 12, donors expressed strong support for the Government of Ghana's Economic Recovery Program, launched in April 1983. The program was described variously as "outstanding," "courageous" and an "exemplary model" for sub-Saharan Africa. The Group, comprising 8 bilateral donors and 10 multilateral institutions met under the chairmanship of The World Bank's Regional Vice President for Western Africa, Mr. Wilfried P. Thalwitz. The Ghana delegation was led by the Provisional National Defence Council (PNDC) Member and the Chairman of th·e newly constituted National Economic Commission, Mr. Justice Annan. The delegation included PNDC Secretary for Finance and Economic Planning, Dr. Kwesi PNDC Secretary for Fuel and Power, Dr. Appiah Korang; the PNDC Botchwey; the _ Secretary for Land and National Resources, Mr. Kwesi Renner; and the PNDC Secretary for Transport and Communications, Mr. Kwame Peprah. Speaking of the Government of Ghana's endeavor to rehabilitate the national economy and put it on the path of sustained growth, Mr. Justice Annan described the "far reaching policy reforms" undertaken by Ghana. These included a flexible exchange rate policy, adjustments in interest rates, freeing most products from price controls, eliminating subsidies, increasing producer prices, expanding export incentives, and streamlining the institutional framework. In instituting these reforms, he said, it was not the government's intention to abdicate its responsibility to bring about growth. These measures were rather designed to involve all segments of society, from the smallest farmers, craftsmen and petty traders to talented entrepreneurs, in the development process. The government and the private sector have to work together, he said, to harness national resources to economic expansion. Mr. Justice Annan noted that the response of the economy had been so encouraging that the government not only intended to continue these policies but to pursue them with increased vigor. He informed the Group that the National Economic Commission would undertake regular reviews to monitor implementation of the economic reform program and assist in the speedy removal of bottlenecks to implementation.  - 2 - Dr. Kwesi Botchwey, PNDC Secretary for Finance and Economic Planning, in his intervention, pointed out that significant advances had been made in the management of the economy and in the implementation of the Recovery Program, against heavy odds, through the sacrifices of the Ghanaian people and the assistance and cooperation of the international community. Dr. Botchwey listed the main items on the government's agenda in the coming 12 months. These included further progress in the overall incentive framework, particularly for the private sector, a medium-term development program that begins to address structural problems, and an acceleration of current efforts at institutional reform, including reform of public corporations. Members of the Consultative Group uniformly applauded the further policy measures taken by the Ghana government since the last meeting of the Group in December 1983. They noted that the reform program was not only on track, but also significantly ahead of schedule. Several donors noted that this placed a special obligation on the international community to respond equally vigorously. Members noted with approval the government's agenda for further policy reform and recognized the need to cushion the impact of these measures on the poor. A number of constraints facing implementation of the reform program were discussed. These included the wage-price disparities, administrative and manpower constraints, agricultural incentives, investment policy and slow disbursement of committed aid. Donors stressed the importance of aid coordination. They recognized that this is rightly the function of government. They endorsed the steps the government has already taken to strengthen coordination. They also encouraged The World Bank and UNDP to assist government in the discharge of this function. Donors endorsed the proposed import program for 1985. Preliminary indications provided at the meeting amounted to about $450 million for 1985. In addition, indications of export credits amounted to $75 million. The United Kingdom also announced that subject to parliamentary approval some 151 million of repayments due on past aid loans would be converted into grants. This suggests that the financing requirements for the 1985 import program would be met. Many bilateral donors substantially increased their support. Several donors were not in a position to provide indications beyond 1985, but their tentative indications of the likely trends in their support assured a reasonable prospect for financing the' 1986 import programme. Members of the Consultative Group attending the meeting were Canada, France, Germany, Italy, Japan, Switzerland, United Kingdom, United States, the African Development Bank, the Commission of the European Communities, the Arab Bank for Economic Development in Africa, the European Investment Bank, International Fund for Agricultural Development, International Monetary Fund, the OPEC Fund, United Nations Development Programme, World Food Programme, and The World Bank Group. The following countries and institutions were represented as observers: Brazil, the Economic Commission of West African States, Korea, Netherlands, Spain, the Organisation for Economic Cooperation and Development, and Saudi Arabia. - 0 -