The World Bank’s International Development Association (IDA) has committed US$1.2 billion to support Ghana’s economy over the next three years.
The allocation, which will span July 2017 to June 2020, will be channelled into budget support and special social intervention projects.
As part of the 18th replenishment of the IDA, an amount of US$75 billion has been pledged to the World Bank to support poor countries.
Although Ghana is classified as a lower middle-income country, it will receive US$1.2bn of that amount.
The World Bank Country Director for Ghana, Mr Henry Kerali, announced this and said a significant proportion of about 20 to 30 per cent of the support would be provided through budget support every year, while the rest would be for specific projects such as water, transport, education and health.
Briefing journalists on the just-ended World Bank Group/International Monetary Fund (IMF) Spring meetings in Washington, he said, the allocation to Ghana formed part of discussions held with representatives of the new government.
“We also discussed the forthcoming allocation to Ghana from the IDA part of the World Bank. A total of about US$1.2 billion over the three-year period from July 2017 up to June 2020 will be made available to the country through the World Bank,” he said.
Mr Kerali explained that the performance of the selected projects would determine the rate of disbursement of the allocation, although the World Bank expected to disburse the total amount between five and seven years.
“The performance of those projects will dictate how fast the funds will be disbursed. For projects that perform well, the disbursement will be fast and for projects that perform slowly, the disbursement will be slow. We hope that overall, the total amount will be disbursed between the period of five to seven years because our projects are usually of that duration,” he said.
The allocation is expected to increase because the International Finance Corporation (IFC) is likely to provide additional funding to Ghana. The amount was, however, not readily known.
“The amount will, of course, increase because in addition to that amount by IDA, there is also the IFC which provides support to the private sector. IFC will provide additional funds on top of the US$1.2 billion. I am not mentioning the IFC amount because I believe that should come from IFC,” he explained.
Mr Kerali explained that the World Bank was projecting a six to seven per cent growth rate for the economy in 2017. The growth, he explained, would be largely on the back of improved commodity prices and macro-economic performance.
“We expect that growth in Ghana will be robust. For 2017, we are forecasting a growth of six to seven per cent and potentially higher in 2018. The main drivers of growth are the expected better performance of commodity prices. Our forecast of commodity prices are a gradual increase in the medium term, so despite the drop in the last couple of days, we forecast in a medium term a gradual increase.
“Ghana has a significant revenue potential from oil, gas and gold, all of which are expected to increase. We are anticipating an improved macro-economic performance,” he noted.