Ghana will benefit from a $300 million facility approved by the World Bank yesterday, which will help to bolster macroeconomic stability and foster economic expansion.
The World Bank’s International Development Association is providing a concessional loan facility under the Development Policy Operation for Ghana to aid in the country’s budget execution and promote inclusive growth.
This raises the total to $900 million that the World Bank and the International Monetary Fund (IMF) approved for Ghana in less than a week to aid in the nation’s economic expansion and recovery.
The approval of this financing package came after the Official Creditors’ Committee under the G20 Common Framework last week agreed in principle on the main elements of the proposed debt restructuring for Ghana, according to a statement that was posted on the World Bank’s website on Tuesday.
Restoring debt sustainability was deemed to be a major accomplishment of the agreement, which was in line with the Joint World Bank-International Monetary Fund Debt Sustainability Framework.
The Executive Board of the IMF approved the $600 million second tranche under Ghana’s 36-month Extended Credit Facility with the IMF last Friday. At a press conference hosted by the Bank of Ghana, Ministry of Finance, and International Monetary Fund (IMF), Finance Minister Ken Ofori-Atta announced that the approval of the $600 million by the IMF was also attracting an additional $300 million from the World Bank for budget support and an additional $250 million to help establish the Ghana Financial Stability Fund.
The DPO, according to the World Bank, is the first of three $300 million operations that are part of the organization’s larger engagement for crisis response and resilience in Ghana.
In the meantime, the World Bank states that “its objectives are to strengthen fiscal sustainability, support private sector development and stability, improve energy sector financial discipline, and strengthen social and climate resilience.”
According to the statement, the country’s social protection system was strengthened, domestic revenue mobilization was strengthened, spending was kept under control, financial sector stability was protected, barriers to private investment were removed, the energy sector was placed on a more stable financial and operational foundation, and climate adaptation and mitigation were mainstreamed across policies.
Restoring fiscal and debt sustainability, bolstering growth prospects, curbing inflation, and protecting the most vulnerable—measures supported by this financing—are urgent priorities for Ghana, according to Ousmane Diagana, Vice President of the World Bank for Western and Central Africa, who made this statement in response to the Executive Board of the World Bank’s approval of the $300 million support to Ghana.
These are also necessary actions to help the nation draw in more international investment, revitalize its domestic private sector, increase its ability to withstand climate change and raise the standard of living for its citizens.
The World Bank has approved the DPO, requiring Cabinet approval for $300 million, which then goes to Parliament for disbursement.
However, Mr. Ofori-Atta stated in a phone conversation conducted exclusively yesterday that “what we have accomplished as a nation since the start of the year 2024 is very significant.” The $300 million World Bank DPO and the $600 million IMF payout have given us a lot of momentum in our efforts to promote macroeconomic growth and stability.
Although external headwinds did buffet us over those difficult years, as a people, we made the tough choices, and we have indeed turned the corner. He exclaimed!!!
