Parliament approves $360m World Bank facility to boost Ghana’s economic recovery

Parliament has approved a $360 million financing agreement between the Government of Ghana and the International Development Association (IDA) of the World Bank Group to support the country’s post-crisis economic recovery and long-term resilience.

The facility—part of the Second Resilient Recovery Development Policy Financing (DPF) operation—is expected to bolster Ghana’s fiscal consolidation efforts, strengthen the financial sector, promote energy sector reforms, and enhance social and climate resilience.

The agreement was laid before the House and reviewed by the Finance Committee, which presented its report in Parliament this week. According to the Committee, the funds are crucial to sustaining the current momentum in macroeconomic stabilisation and implementing reforms under the government’s Post-COVID-19 Programme for Economic Growth (PC-PEG).

Key Areas of Focus

The financing is structured around three main pillars:

Restoring Fiscal Sustainability – The facility will help consolidate gains made under the IMF-supported programme, particularly in domestic revenue mobilisation, public financial management, and debt transparency.

Strengthening Financial Sector Stability and Energy Sector Reform – It aims to enhance the operational and financial viability of the energy sector and improve risk-based supervision of financial institutions.

Enhancing Social, Climate, and Economic Resilience – This includes expanding access to social protection, addressing gender gaps, and improving climate-responsive planning and spending.

Favourable Terms

The loan comes with highly concessional terms, including a 1.25% service charge, no interest, a 5-year grace period, and a 30-year repayment schedule. The Committee emphasised that the facility is aligned with Ghana’s medium-term debt strategy and will not unduly burden the country’s debt sustainability outlook.

Background and Context

This facility is part of a broader World Bank support package to Ghana, which also includes investment lending and technical assistance. It complements earlier budgetary support under the first Resilient Recovery DPF and is designed to reinforce ongoing reforms under Ghana’s IMF programme.

The Committee, chaired by Hon. Isaac Adongo, recommended the agreement for adoption after noting that the terms were favourable and the intended reforms were essential for building a more resilient and inclusive economy.

The motion was subsequently adopted by Parliament, clearing the way for the Ministry of Finance to access the funds and commence implementation of the outlined policy actions.