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The first tranche of the $300 million World Bank funds has hit the accounts of the Bank of Ghana, sources close to the arrangement have told the Daily Graphic.
This is expected to further boost the country’s foreign international reserves and help cushion the Cedi which has depreciated by 6.8 per cent since the beginning of the year. The $300 million represents the first tranche of the $900 million three-year development policy budget support programme for the country.
Under the programme, Ghana is expected to receive $300 million each year for a period of three years for budget support. The World Bank in a release in January, 2024, said the first Resilient Recovery Development Policy Financing was a critical contribution by the Bank’s International Development Association (IDA) to help Ghana’s economic recovery and support the country’s resilient and inclusive growth.
Among other things, it seeks to restore fiscal sustainability, support financial sector stability and private sector development, improve energy sector financial discipline, and strengthen social and climate resilience.
Specific reforms supported by this financing series include strengthening domestic revenue mobilisation, controlling expenditure, safeguarding financial sector stability, removing barriers to private investment, setting the energy sector on a sounder financial and operational footing, strengthening the country’s social protection system, and mainstreaming climate adaptation and mitigation across policies.
The approval of this financing package followed the agreement in principle by the Official Creditors’ Committee under the G20 Common Framework on the key parameters of the proposed debt restructuring for Ghana. The agreement, which is consistent with the Joint World Bank-International Monetary Fund Debt Sustainability Framework, represents a critical milestone toward restoring debt.
The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programmes that boost economic growth, reduce poverty and improve poor people’s lives.
IDA is one of the largest sources of assistance for the world’s 74 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change to the 1.3 billion people who live in IDA countries. Since 1960, IDA has provided $458 billion to 114 countries.
Annual commitments have averaged about $29 billion over the last three years (FY19-FY21), with about 70 per cent going to Africa.
