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
What you should know
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.
