New World Bank funding must be used judiciously
The World Bank’s recent approval of $360 million in additional support for Ghana’s economic recovery is welcome news.
At a time when the country is striving to restore macroeconomic stability, this funding is a timely boost to support government reforms and build resilience across key sectors.
Disbursed through the International Development Association (IDA), the facility forms part of the Second Resilient Recovery Development Policy Financing initiative. It aims to support Ghana’s post-crisis recovery and promote inclusive growth focused on job creation and structural transformation.
The Development Policy Operation (DPO) will help restore fiscal sustainability, strengthen financial sector stability, enhance energy sector discipline, and improve social and climate resilience.
This support reflects confidence in Ghana’s reform agenda and long-term potential. However, this goodwill must not be taken for granted.
The government must ensure that the funds are used transparently and efficiently to tackle the structural weaknesses that have long hindered development.
Ghana’s economy is gradually recovering from the shocks of the COVID-19 pandemic and a mounting debt burden.
These challenges resulted in credit downgrades, cutting off access to international capital markets and increasing reliance on short-term domestic borrowing—thereby crowding out the private sector and constraining job creation.
The Ghanaian Times commend the World Bank for its consistent support. Indeed, during the pandemic, it provided vital resources to help Ghana manage public health needs and meet fiscal obligations and the current funding presents another opportunity to implement long-term reforms and boost investor confidence.
Importantly, the funds must be channelled into productive sectors like manufacturing and agriculture, which have the potential to create jobs and support export-led growth.
Reforms in the energy sector, which continues to exert fiscal pressure, are also critical. Financial discipline and operational efficiency in this sector will contribute to overall economic stability.
World Bank Country Director Robert Taliercio has rightly highlighted the need to entrench fiscal and debt sustainability, improve the business environment, and protect vulnerable populations.
These goals are essential to revitalising the private sector and building resilience to climate change.
It is very reassuring that Finance Minister, Dr Cassiel Ato Forson, has expressed confidence that the measures backed by the DPO will help build a more inclusive and resilient economy.
This optimism must now be matched with concrete action since Ghana cannot afford to rely indefinitely on external loans.
The country reportedly loses over $3 billion annually to corruption, waste, and illicit financial flows—more than it is borrowing from the IMF over three years.
We believe that by curbing these losses and prioritising prudent spending, the government could generate sufficient domestic resources for development.
This World Bank facility should therefore serve as a catalyst, not a crutch.
Ghana must use this opportunity to reset its economy and build a sustainable future, free from overdependence on external financing.