The $300 million World Bank facility earmarked for various projects in 2024 has finally been transferred to the Bank of Ghana’s (BoG) account.

Ghana fulfilled all necessary conditions, including securing approvals from Cabinet and Parliament, to facilitate this transfer. According to Joy Business, the funds were transferred on the morning of March 27, 2024.

The BoG is now expected to convert the dollars into cedis and distribute the equivalent amount to government agencies and ministries.

The foreign exchange component of this facility is expected to bolster the international reserves of the Bank of Ghana. Data from the BoG indicates that its Gross International Reserves exceeded $6 billion by the end of February 2024.

Finance Minister Dr. Mohammed Amin Adam recently stated during a media engagement that the government anticipates receiving around $1.2 billion from development partners before the year ends. This disbursement is crucial for expediting infrastructure projects outlined in the 2023 Budget that were delayed due to the late arrival of donor support.

Originally scheduled for disbursement late last year, the World Bank's release of this facility was delayed as Ghana struggled to reach an agreement with its bilateral creditors, hampering the approval process for the $300 million loan.

This inflow is expected to curb the depreciation of the cedi by signaling to the international market that the Central Bank is better equipped to stabilize the local currency.

The $300 million Development Policy Financing, the initial tranche of a three-part series, is aimed at crisis response and resilience-building in Ghana. Its primary objectives include restoring fiscal sustainability, enhancing financial sector stability and private sector development, improving energy sector financial management, and bolstering social and climate resilience.

This disbursement is expected to enhance domestic revenue mobilization, control expenditures, ensure financial sector stability, facilitate private investment, stabilize the energy sector financially and operationally, fortify the country's social protection system, and integrate climate adaptation and mitigation into policies.

Background:This disbursement is part of the overall financial support from Ghana's donors as part of the IMF program secured by the country in May 2023. The IMF has already provided approximately $1.2 billion to Ghana under the FUND program.

According to the World Bank, this initial tranche of the Resilient Recovery Development Policy Financing is a crucial contribution from the Bank's International Development Association. It is designed to assist Ghana in its economic recovery and promote resilient and inclusive growth.

The World Bank approved this facility in January 2024 following an agreement in principle by the Official Creditors' Committee under the G20 Common Framework on the key parameters of Ghana's proposed debt restructuring. This agreement aligns with the Joint World Bank-International Monetary Fund Debt Sustainability Framework, marking a significant step toward restoring debt sustainability.