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World bank approves $300 million for Ghana to help economic recovery

The World Bank Group has given the approval for a $300 million funding package aimed at bolstering Ghana’s economy. This decision follows Ghana’s recent agreement with its official creditors to restructure certain aspects of its external debts, a deal finalized just over a week ago.

In an official statement, the international financial institution emphasized that this agreement marks a crucial step in the direction of restoring the debt sustainability of the West African nation.

The approved financing is planned to support the implementation of government programs, with a focus on enhancing domestic revenue mobilization, managing expenditures, and ensuring the stability of the financial sector.

This fund represents the first in a three-part operation, each amounting to $300 million. It is an important component of the extensive involvement by the World Bank to address crises and enhance resilience in Ghana.

Last week, Ghana received payment of around $600 million as part of its $3 billion bailout program with the International Monetary Fund (IMF).

Ghana secured a $5.4 billion debt restructuring deal with its creditors in January which will signal the release of $1.25 billion financing from the IMF to shore up the economy

Ghana faced one of its most severe economic crises in 2023 which saw inflation surge to over 50% at one point. However, as of November 2023, inflation has decreased to 26.4%. Additionally, the Cedi experienced an over 11% devaluation in the initial half of 2023.

Although, the central bank has been able to tame inflation with rates dropping from 35.6% in October to 26.4% in November representing a decline of 8.8% in one month.

In December 2022, Ghana suspended payments on a significant portion of its $28.4 billion external debt, effectively entering a state of default. Nevertheless, the country successfully negotiated a $3 billion deal with the IMF.

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