By Kofi Ahovi
The Board of Directors of the World Bank last week approved a total of US$535 million to support three credit facilities aimed at helping improve economic governance and stabilizing Ghana’s economy.
These are Economic Governance and Poverty Reduction Credit (EGPRC) US$300 million, Transport Sector Project, US$225 million and Natural Resources and Environmental Governance (NREG) US$10 million
These first set of credits are part of US$1.2 billion the Bank plans to support the government of Ghana with over the next three years. The credit has a zero interest rate with a 40-year period of maturity including a 10-year grace period.
The government is currently faced with a difficult macro-economic situation, the consequence of combination of domestic and external shocks (fuel and food crisis, droughts and floods in the North, financial crisis and global slowdown) which revealed and exacerbated a number of structural challenges in the public sector in general, and in the energy sector in particularly, and which, if left un-tackled, would undermine Ghana's growth and development prospects.
The Government has indicated its willingness to undertake necessary reforms. Recognizing the severity of the situation and the related financing gaps, the Government requested assistance from the World Bank in April 2009.
The Economic Governance and Poverty Reduction Credit (EGPRC) is a budget support operation which aims to assist Ghana’s efforts to bring the fiscal situation back on a sound and sustainable track while protecting the development objectives set forth in Ghana’s Second Growth and Poverty Reduction Strategy (GPRS II) for the period 2006-2009.
The credit will be disbursed in two tranches. The first tranche of US$150 million will be effected immediately. The financing agreement was signed by the government and the World Bank in early July 2009.
The second will take place in the third quarter of 2009, immediately after the Ghana government has completed the actions it has committed to take.
These actions include; establishing a single treasury account, improving compliance with the public procurement law, correcting any budget deviations (fiscal deficit, pro-poor expenditures) that may have arisen at mid-year through new fiscal measures, publishing fiscal accounts with less than one quarter lag, and submitting to Parliament the Freedom of Information Bill.
According to Ishac Diwan, World Bank Country Director for Ghana, the actions are not externally imposed conditionalities but actions that the government decided to undertake in order to ensure fiscal prudence, transparency and accountability in the delivery of services.
The objective of the Transport Sector project is to improve mobility of goods and passengers through reduction in travel time, vehicle operating cost, and implementation of safety strategy. This objective will be achieved through strengthening the capacity of transport institutions in planning, regulation, operations and maintenance.
The Natural Resources and Environmental Governance Credit is the second in the series of three Development Policy Operations (DPOs) for the period 2008-2010. It is a sector budget support operation targeting the natural resources and the environmental sectors.
The first operation was prepared and executed in 2008. The objectives of the three series of operations are to ensure predictable and sustainable financing for the forest and wildlife sectors and effective forest law enforcement; improve mining sector revenue collection, management, and transparency; and address social issues in forest and mining communities.
It also includes mainstreaming environment into economic growth through Strategic Environmental Assessment (SEA), Environmental Impact Assessment (EIA), and development of a Climate Change Strategy.
The Board of Directors of the World Bank last week approved a total of US$535 million to support three credit facilities aimed at helping improve economic governance and stabilizing Ghana’s economy.
These are Economic Governance and Poverty Reduction Credit (EGPRC) US$300 million, Transport Sector Project, US$225 million and Natural Resources and Environmental Governance (NREG) US$10 million
These first set of credits are part of US$1.2 billion the Bank plans to support the government of Ghana with over the next three years. The credit has a zero interest rate with a 40-year period of maturity including a 10-year grace period.
The government is currently faced with a difficult macro-economic situation, the consequence of combination of domestic and external shocks (fuel and food crisis, droughts and floods in the North, financial crisis and global slowdown) which revealed and exacerbated a number of structural challenges in the public sector in general, and in the energy sector in particularly, and which, if left un-tackled, would undermine Ghana's growth and development prospects.
The Government has indicated its willingness to undertake necessary reforms. Recognizing the severity of the situation and the related financing gaps, the Government requested assistance from the World Bank in April 2009.
The Economic Governance and Poverty Reduction Credit (EGPRC) is a budget support operation which aims to assist Ghana’s efforts to bring the fiscal situation back on a sound and sustainable track while protecting the development objectives set forth in Ghana’s Second Growth and Poverty Reduction Strategy (GPRS II) for the period 2006-2009.
The credit will be disbursed in two tranches. The first tranche of US$150 million will be effected immediately. The financing agreement was signed by the government and the World Bank in early July 2009.
The second will take place in the third quarter of 2009, immediately after the Ghana government has completed the actions it has committed to take.
These actions include; establishing a single treasury account, improving compliance with the public procurement law, correcting any budget deviations (fiscal deficit, pro-poor expenditures) that may have arisen at mid-year through new fiscal measures, publishing fiscal accounts with less than one quarter lag, and submitting to Parliament the Freedom of Information Bill.
According to Ishac Diwan, World Bank Country Director for Ghana, the actions are not externally imposed conditionalities but actions that the government decided to undertake in order to ensure fiscal prudence, transparency and accountability in the delivery of services.
The objective of the Transport Sector project is to improve mobility of goods and passengers through reduction in travel time, vehicle operating cost, and implementation of safety strategy. This objective will be achieved through strengthening the capacity of transport institutions in planning, regulation, operations and maintenance.
The Natural Resources and Environmental Governance Credit is the second in the series of three Development Policy Operations (DPOs) for the period 2008-2010. It is a sector budget support operation targeting the natural resources and the environmental sectors.
The first operation was prepared and executed in 2008. The objectives of the three series of operations are to ensure predictable and sustainable financing for the forest and wildlife sectors and effective forest law enforcement; improve mining sector revenue collection, management, and transparency; and address social issues in forest and mining communities.
It also includes mainstreaming environment into economic growth through Strategic Environmental Assessment (SEA), Environmental Impact Assessment (EIA), and development of a Climate Change Strategy.
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