The Board of Executive Directors of the World Bank Group today discussed a new Country Partnership Strategy (CPS) for Ghana that would provide a range of services to meet the country's development needs.
The strategy includes financing of approximately $1.4 billion in new assistance between 2013-2016, from the International Development Association (IDA), the fund for the world's poorest countries.
The CPS builds on the important macroeconomic and social gains made under the previous Country Assistance Strategy (CAS) which ended in June of 2012. The CPS is organized around three main themes: (1) improve economic institutions; (2) improve competitiveness and job creation; and (3) protect the poor and vulnerable.
The CPS was also designed in keeping with the principles agreed under a Compact between the Government of Ghana and major Development Partners in order to ensure effective harmonization of support and increased aid effectiveness.
Both the CPS and the Compact are aligned to the Government's medium term development framework, the Ghana Shared Growth and Development Agenda (GSGDA) whose key goals include fast-tracking Ghana's progress towards achieving the MDGs, consolidating the country's middle income status and raising GDP per capita to US$3,000 by 2020.
The period of the previous strategy saw substantial growth, driven largely by good commodity and mineral prices and to some extent, Ghana's new oil find. Poverty continued to decline. The period also witnessed positive trends in rural development and increasing urbanization, coupled with strong growth in the construction and the services sectors.
Despite some recent internal and external shocks, the Government, development partners, private investors remain cautiously optimistic about Ghana's future. The World Bank shares this optimism, despite concerns about the danger of slippages in the form of large budget deficits, high inflation, high interest rates, dips in the exchange rate, and public expenditure patterns that leave very little for much needed capital investments.
"The CPS inherits a substantial portfolio consisting of 25 operations with a total commitment of US$1.5 billion, in addition to eight regional operations with an additional net commitment of US$752 million," said Yusupha Crookes, the World Bank Country Director for Ghana.
The CPS incorporates interventions by IDA, the International Finance Corporation (IFC), and Multilateral Investment Guarantee Agency (MIGA). Current total WBG exposure to Ghana is approximately US$3.5 billion, consisting of US$2.3 billion of credits and grants from IDA, US$341 million in investment guarantees from MIGA, and a committed portfolio of $849 million in investments from IFC's own account, in addition to $136 million comprising B-loans and parallel loans for which IFC is the agent.
Mary-Jean Moyo, IFC Senior Manager for Ghana, said "The World Bank Group Country Partnership Strategy requires increased private sector investment to promote a robust economy, improved job prospects, and shared prosperity.
IFC will work closely with other World Bank Group institutions, the government and private companies to encourage public-private partnerships in infrastructure, and increased investment across a range of sectors important for Ghana's future."
The CPS will serve as the World Bank Group's main instrument to support Ghana's efforts to promote more inclusive economic growth, create jobs, stem absolute poverty, foster shared prosperity, deliver more decentralized public services, improve urban planning and rural development, and provide more skills training and capacity building opportunities.
It will directly support action by the Government of Ghana to consolidate gains made in poverty reduction, including by support for social protection programs such as Livelihood Empowerment Against Poverty (LEAP), the National Health Insurance Scheme and youth empowerment/employment programs.
"During the period of this CPS, we will devote our support to high impact interventions, helping to ensure that public funding is pro-growth and pro-poor and that costly budget deficits are avoided.
Our work will not be limited to the public and private sectors only. We will continue to support CSO and think-tanks by promoting openness, transparency, accountability and help find ways of ensuring that the country's considerable natural resource wealth is used to fuel development," said Mr. Crookes.
About the World Bank Group
The World Bank Group is one of the world's largest sources of funding and knowledge for developing countries. It comprises five closely associated institutions: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), which together form the World Bank; the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); and the International Centre for Settlement of Investment Disputes (ICSID). Each institution plays a distinct role in the mission to fight poverty and improve living standards for people in the developing world.
Upon achieving lower middle income status, Ghana, as of July 1, 2013, accesses IDA funding on terms which consists of concessional credits with a maturity period of 25 years, with a five-year grace period and an annual interest of 1.25%.