World Bank to lend Ghana $1bn under IMF programme – Finance Chief Ofori-Atta
Ghana is set to receive a significant financial boost from the World Bank, with nearly $1bn expected to be advanced to the West African country over the next three years, according to Ghana’s Finance Minister, Ken Ofori-Atta. However, there is a catch – this funding is contingent on Ghana securing an IMF programme, separate from the $3bn that the country is already expecting to receive from the IMF to support its Balance of Payment.
Ofori-Atta made the announcement during the IMF/World Bank spring meetings in Washington DC earlier this week, adding that the World Bank funds would be directed towards some of the projects and initiatives outlined in Ghana’s 2023 budget. While the finance minister was optimistic about Ghana’s chances of securing the IMF programme, it is worth noting that the IMF is currently awaiting assurance from the Paris Club of Bilateral Creditors that the group is committed to extending the required financial support.
If the IMF programme is secured, the finance minister has pledged to strictly enforce fiscal discipline, promising to introduce new policy measures to cut waste in the public sector and improve revenue mobilisation. Ofori-Atta admitted that there are many businesses in Ghana that are not paying taxes or under-declaring their earnings, justifying recent tax measures introduced by the Ghana Revenue Authority. The minister also expressed concerns that the government may not meet its projected revenue targets due to delays in passing the law.
It’s not just the World Bank that will be providing financial assistance to Ghana. Ofori-Atta also disclosed that the $1.5bn Ghana Financial Stability Fund would be operational from July 2023, aimed at supporting financial institutions that have been hit by the Domestic Debt Exchange Programme. Ghana is also expecting $250m from the World Bank and the African Development Bank by June of this year.
The financial support from these institutions is crucial for Ghana, which has been facing economic challenges over the past few years. While the country has made progress in some areas – such as increasing its GDP growth rate from 0.4% in 2020 to an estimated 4.5% in 2022 – it still faces significant challenges, including a high public debt-to-GDP ratio, a large fiscal deficit, and persistent inflation.
While the funding from the World Bank and the IMF is welcome news for Ghana, it is important for the government to ensure that the money is utilised effectively and efficiently. This means implementing policies that will not only stabilise the economy but also help to create sustainable growth in the long term. If Ghana can achieve this, it will not only be able to weather the current economic challenges but also become a shining example of how countries can use financial support from international institutions to build a more resilient and prosperous future.
