The World Bank has disclosed plans to offer $300 million in budget support to Ghana, which is a key step towards supporting its economic stability and growth. This declaration was made at the IMF/World Bank annual meetings in Marrakech, Morocco.
According to reliable sources close to the World Bank in Washington, D.C., Ghana has diligently fulfilled most of the prerequisites set forth by the Bank, paving the way for the final approval of this substantial financial assistance.
The expected approval by the World Bank’s Board is contingent upon the International Monetary Fund’s (IMF) Board granting its consent for the second tranche of funds following Ghana’s successful completion of the First Programme Review. The IMF Board is scheduled to convene on November 22, 2023.
In addition to the $300 million in budget support, the World Bank is also poised to disburse approximately $250 million to the Ghana Financial Stability Fund. This fund is designed to aid banks adversely affected by the Domestic Debt Exchange Programme.
The Ministry of Finance has pledged to contribute around $700 million as its seed capital for the Fund, with plans for the Fund to become operational by the end of October 2023.
Ghana’s eligibility for this financial support from the World Bank arises from its completion of essential economic reforms aimed at stabilizing the nation’s economy. The recent Staff-Level Agreement reached with the IMF following the First Programme Review has been instrumental in facilitating these disbursements.
The World Bank has recognized Ghana’s substantial progress in various programs aimed at economic restructuring, thereby reinforcing its commitment to support the country.
By the close of 2023, it is anticipated that the World Bank will provide Ghana with over $500 million in budget support and other initiatives. If Ghana secures the IMF Board’s approval of an additional $600 million in the third week of November 2023, the nation could potentially receive more than $1.2 billion in combined support from these two international financial institutions.
The African Development Bank is also expected to contribute its support once Ghana secures the IMF Board’s approval of the First Programme Review.
In July 2023, the World Bank released a report titled “Price Surge: Unraveling Inflation Toll on Poverty and Food Security,” in which it projected that Ghana’s economy would recover to its full potential by 2025. However, it cautioned that growth might slow down in 2023 and remain subdued in 2024. The report advised Ghana to enhance its domestic revenue collection by streamlining tax incentives and improving revenue administration.
In response to these developments, Ghana’s Finance Minister, Ken Ofori Atta, expressed optimism about the country’s economic growth, anticipating that it would surpass the initial projection of 1.5 per cent and reach a growth rate exceeding 2.5 per cent by December 31, 2023.