Ghana’s Growth and Poverty Reduction Strategy Receives US$140 Million Support from the World Bank

In Ghana: Kafu Kofi Tsikata (233-21) 229681
ktsikata@worldbank.org

WASHINGTON, June 15, 2006 – The World Bank Board today approved US$140 million in support of the implementation of Ghana's Growth and Poverty Reduction Strategy (GPRS II). This year’s budget support is the fourth in the series under the Multi-Donor Budget Support (MDBS) framework under the new GPRS II.

Referred to as the Fourth Poverty Reduction Support Credit (PRSC-4), it is to be used to promote gains made in the areas of primary education and health, as well as to help sharpen the focus on growth-related areas in the energy, financial and natural resource management sectors. 

Three previous PRSCs amounting to US$375 million of direct budget support were disbursed by the World Bank to support GPRS I.

According to the Country Director of the World Bank, Mats Karlsson, “we set out about four years ago to support Ghana’s far-reaching poverty reduction strategy. Ghana now needs considerable investment in infrastructure. Today, I am confident to say that we have made some important gains across board.  Primary school enrolment particularly for girls in schools has improved; while great achievements in macro economic performance as shown by decreasing inflation and interest rates and a stable exchange rate have continued to provide the solid foundation for private sector driven growth.”

“But Ghana should be more ambitious!   The President’s vision of a Middle Income Status for Ghana is attainable given the resources available to Ghana, be it human or natural resources and aid.”

Carlos Cavalcanti, the World Bank’s Lead Economist for Ghana, and Task Team Leader for the PRSC-4 notes, “Our support for Ghana in the coming year will aim at consolidating the achievements in human developments with a view of reaching the MDGs ahead of schedule, and will sharpen our focus on growth, focusing on areas that are critical for accelerating growth and where there are scaling up opportunities.”

In GPRS II three broad pillars of growth and poverty reduction have been identified by the Government for focus: (i) accelerated private sector-led growth (ii) vigorous human resource development, and (iii) good governance and civic responsibility.

Employment-generating private-sector activities in agriculture and industry is supported, with a special focus on exports, SME development and public private partnerships in the implementation of Ghana’s ICT-led growth program.

In the area of human resource development, the Bank shall be supporting Government efforts directed towards the extension of the capitation grants, removal of school fees, deployment of teachers and health care professional to under-served areas, and the implementation of the health insurance scheme.

With regard to governance the Bank will be supporting public sector reform, decentralization and public financial management. The management of public funds both at the central and local government levels continues to be a central challenge, including the implementation of the new regulatory framework for public financial management in Ghana (i.e. the new Public Procurement Act, the Financial Administration Act and the Internal Audit Agency Act, and the operationalization of the Government’s computer-based financial and accounting information systems). 

Government efforts to improve monitoring and evaluation through public institutions and the Parliament, and the participation of traditional authority, civil society and the general public in the monitoring process will receive support as well.

As Mats Karlsson notes again, “development is about people, and their full ownership and participation in all aspects of the development process must be encouraged, for sustainability and for better results on the ground.  In a few days, we shall be holding another round of Consultative Group (CG) Meetings where the Government and all its development partners meet to review progress so far and outline future areas of collaboration and support.  We are anticipating a strong and proactive civil society participation. This is all part of the civic responsibility outlined in GPRS II.”

When approving the PRSC-4, the World Bank Board of Directors noted the importance of translating the GPRS II broad policy framework into a set of time-bound, monitorable actions and results, and of continuing to rely on concessional sources of financing to implement the Government’s ambitious investment plans.