The World Bank’s International Development Association (IDA) will provide Ghana with an amount of $1.2 billion from July 2017 to June 2020 to support the country’s economy.
Government of Ghana is expected to use the funds to support its budget and special social intervention projects.
The $1.2 billion is part of a total amount of $75 billion from the 18th replenishment of the IDA to support poor countries.
Henry Kerali, World Bank Country Director for Ghana, made this known while addressing a press conference at the just-ended World Bank Group/International Monetary Fund (IMF) Spring meetings in Washington.
Even though Ghana is classified as a lower middle-income country, it will receive the allocated amount.
Mr. Kerali explained that a significant proportion of the $1.2 billion (20 to 30 percent) would be provided through budgetary support every year, while the rest would be used for specific projects such as water, transport, education and health.
He said discussions about the allocation to Ghana have been held with representatives of the government, stating “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 said the performance of the selected projects would determine the rate of disbursement of the allocation, although the World Bank expects 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.
Mr. Kerali said the International Finance Corporation (IFC) is likely to provide additional funding to Ghana, which increase the allocation.
“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.
Meanwhile, the World Bank is confident of a rebound in Ghana’s economic growth this year, projecting a six to seven percent 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 percent 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,” Mr. Kerali said.