Press Release from 2021-01-12 / Group, KfW Development Bank
German-Ghanaian reform partnership for more investment and employment: KfW signs contract for EUR 40 million
- Long-term improvement of the investment climate and stabilisation of the economic situation during the coronavirus pandemic
- Increase in tax revenues and measures to combat corruption and money laundering
KfW is providing a budget loan of EUR 40 million on behalf of the Federal Ministry for Economic Cooperation and Development (BMZ) under the German-Ghanaian reform partnership to support reforms aimed at increasing tax revenues, fighting corruption and illegal financial flows, and strengthening the rule of law. These reforms include measures to simplify tax legislation and optimise company registration to combat money laundering. This improves the overall conditions for private investment.
The overall reforms are also expected to contribute to stabilising the country’s economic situation in light of the COVID-19 pandemic.
“Ghana, with its diversified economy and enterprising population, is well on its way to continuing its growth trajectory. An efficient and intelligible tax system is an important element in ensuring that domestic revenues can be used to finance urgently needed investments independently of external donors. The Ghanaian government is showing clear resolve to improve the transparency and effectiveness of its structures and to undertake the reform process that KfW is supporting,” says Dr Günther Bräunig, Chief Executive Officer of KfW Group.
The financed reform programme is linked to the Compact with Africa initiative, which was agreed in 2017 during the German G20 presidency to support reform efforts in six African countries.
According to IMF estimates, Ghana’s tax rate is only 14.8%, and the country ranks a mere 80th in the global Corruption Perception Index. In addition, Ghana’s investment climate is also low down in the Doing Business Ranking. The aim is to improve these measurable indicators as part of the reform process.