World Bank lines up US$715m support for Ghana

The Country Director of the World Bank, Pierre Frank Laporte, says the bank is currently processing financial support that could reach up to US$715m to help the government combat the COVID-19 pandemic as well as execute other projects.

Mr. Laporte told Business24 in an interview that the amount includes a US$100m financial support request made by government to enable it undertake a set of projects relating to its fight against the pandemic.

This amount follows a similar support offered by the bank at the onset of the pandemic in early April, when an amount of US$100m was approved as part of the COVID Emergency Preparedness Response Support initiative.

“We are going to give US$315m to Ghana through two projects,” Mr. Laporte said. “The first is a jobs and skills project, which will focus on improving the environment and make funds available for SMEs and focus on building skills in that area. The other project is the recently launched Ghana Accountability for Learning Outcomes Project (GALOP), which will support teaching and learning through modern in-service teacher training and provision of learning materials.”

The Country Director expressed confidence that government’s request should be approved by end of July to provide the needed resources to tackle the pandemic and its ramifications.

He added: “Early in the [World Bank’s] next fiscal year, by September 2020, we expect to bring roughly another US$400m in new projects, including one in the financial sector which will provide credit lines to the development banks and provide guarantees for SMEs. Additional funds will also be dedicated to the water sector—and this time we are focusing on Kumasi.”

Debt service relief

With resource-dependent countries like Ghana, which have been badly hit by the pandemic, asking for a debt service respite from both multilateral and bilateral institutions, Mr. Laporte stated that government may have to formally notify the bank if it intends to benefit from such a favour.

He said although the government agrees that a suspension of its debt service commitments with the Washington-based lender would offer it some respite, the bank is yet to receive an official request to that effect.

“Ghana has not yet officially made a request for debt service suspension. The Finance Minister and his team are still considering this. There are several issues related to that—for instance, there are benefits and costs of such engagement.”

President Akufo-Addo in April announced that an agreement had been reached with the Bretton-Woods institution to freeze the country’s debt service commitments for the rest of the year. Ghana’s outstanding debt to the World Bank stood at US$4.2bn as at May 31.

Mr. Laporte said while a formal notification is yet to be received by the bank from Ghana, other countries that made a similar request have been put on a watchlist by some credit rating agencies—which perhaps could be a reason holding government back.