In a significant move to bolster Ghana’s economic recovery and resilience, the World Bank has approved a US$300 million Development Policy Operation, marking the first installment in a series of three.
The funds are designed to support the West African nation’s inclusive growth and overall economic stability, according to a statement issued by the World Bank.
The approved funding falls under the First Resilient Recovery Development Policy Financing, supplemented by a contribution from the International Development Association (IDA). This financial support comes at a critical juncture for Ghana, as it endeavors to navigate economic challenges and chart a course towards sustainable growth.
The World Bank’s decision to provide the US$300 million financing package follows Ghana’s recent agreement in principle with the Official Creditors’ Committee under the G20 Common Framework on key parameters for the country’s proposed debt restructuring.
This alignment with the Joint World Bank-International Monetary Fund Debt Sustainability Framework is deemed a crucial milestone toward restoring debt sustainability, as highlighted in the official statement.
Mr. Ousmane Diagana, World Bank Vice President for Western and Central Africa, emphasized the urgent priorities supported by this financing. These priorities include restoring fiscal and debt sustainability, curbing inflation, bolstering growth prospects, and protecting the most vulnerable.
Diagana noted that such measures are essential to attracting more foreign investment, revitalizing the domestic private sector, building resilience against climate change, and improving the quality of life for the people of Ghana.
Government Commitment and Fiscal Impact
Ghana’s Finance Minister, Mr. Ken Ofori-Atta, expressed gratitude for the US$300 million infusion, highlighting its vital role in easing the country’s fiscal constraints. Ofori-Atta affirmed the government’s commitment to restoring macroeconomic stability and implementing lasting reforms.
Mr. Ken Ofori-Atta emphasized the importance of sustaining the momentum of economic recovery while ensuring the protection of the poor and vulnerable segments of the population.
According to Minister Ofori-Atta, the funding will contribute significantly to setting Ghana’s economy on a path of strong, long-term sustainable growth and transformation. The government aims to attract more foreign investment, revitalize the domestic private sector, and implement reforms that will shape a resilient and prosperous future for the nation.
The Resilient Recovery Development Policy Operation is the first in a series of three operations of $300 million each and part of a broad World Bank engagement for crisis response and resilience in Ghana.
Its objectives are 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 expenditures, safeguarding financial sector stability, and removing barriers to private investment.
The Resilient Recovery Development Policy Operation also helps in setting the energy sector on a sound financial and operational footing, strengthening the country’s social protection system, and mainstream climate adaptation and mitigation across policies.
The World Bank’s approval of the US$300 million Development Policy Operation stands as a crucial milestone in Ghana’s pursuit of economic stability and growth. As the nation continues to implement reforms and address fiscal challenges, this financial support serves as a beacon of hope, signaling the international community’s confidence in Ghana’s commitment to building a resilient and prosperous future for its people.
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