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The Ministry of Finance has urged President Akufo-Addo not to approve the recently passed anti-LGBTQ bill by Parliament, citing potential significant financial repercussions for Ghana.
In a statement released on Monday, March 4, the Finance Ministry cautioned that signing the bill could lead to substantial losses in World Bank financing, estimating a potential decline of USD$3.8 billion over the next five to six years.
Specifically, the impact for 2024 includes a projected loss of USD$600 million in budget support and USD$250 million for the Financial Stability Fund, which could negatively affect Ghana’s foreign exchange reserves and exchange rate stability.
The Ministry recommended that the President engage with religious bodies to discuss the implications of signing the bill and establish a robust coalition and framework for supporting key development initiatives.
It suggested, “The Presidency may have a structured engagement with local conservative forces such as religious bodies and faith-based organisations to communicate the economic implications of the passage of the ‘Anti-LGBTQ’ Bill and to build a stronger coalition and a framework for supporting key development initiative that is likely to be affected.”
Furthermore, the Ministry proposed that “the President may have to defer assenting to the Bill until the court rules on the legal issues tabled by key national stakeholders (CSOs and CHRAJ).”
The Ministry outlined the potential impacts, including the suspension of financing from the World Bank for various projects and negotiations, which could result in a financing gap in the 2024 budget. This could derail the IMF programme and have adverse effects on debt restructuring efforts and Ghana’s long-term debt sustainability.
The African Development Bank indicated that the passage of the bill would not negatively impact cooperation with Ghana. However, there could be a possible adverse reaction from Germany and the wider European Community.
The Finance Ministry’s recommendations included engaging with conservative countries and deferring the signing of the bill until legal issues are resolved. The Ministry also emphasized the need to continue engaging with the IMF for alternative credible sources of funding, focus on revenue mobilisation, consider expenditure rationalisation, and improve domestic resource mobilisation efforts.
