The World Bank has approved $535 million to support three credit facilities aimed at helping improve economic governance and stabilizing Ghana’s economy.

The amount is the biggest ever to be approved for the country in one sitting of the board of executive directors.

The Economic Governance and Poverty Reduction Credit is worth $300 million, the Transport Sector Project $225 million and the Natural Resources and Environmental Governance facility $10 million.

The entire amount is part of the $1.2 billion the bank plans intends to support the government with over the next three years.

According to a statement released in Washington a while ago the facility is to ease the difficult macro-economic situation, the consequence of combination of domestic and external shocks which has 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 Economic Governance and Poverty Reduction Credit of $300 million is aimed 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 or GPRS II for the period 2006-2009.

The first tranche of $150 million will be released right after Parliament has ratified it hopefully on Thursday.

But the remaining half of the $300 million is expected to be disbursed in September after government has completed what the bank says are actions it has committed to take.

These include establishing a single treasury account, improving compliance with the public procurement law, correcting any budget deviations 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.

The other actions are reconstituting the boards of energy related regulatory utilities and authorities-which has already been done, adopting an electricity sector financial recovery plan and adopting draft legislation on the Ghana Petroleum Regulatory Authority and Oil and Gas Fiscal Regime.

Government is also expected to design a leader in government for the Public Sector Reforms agenda - which can be equated to the appointment of a minister for Public Sector Reform and eliminating ghost workers in health and education services.

One other action it says is extending the number of Livelihood Empowerment Against Poverty (LEAP) beneficiaries, and reviewing the effectiveness of pro-poor expenditures by revising their classification.

The bank however does not like to refer to these as externally imposed conditionalities, but "actions that the government has decided to undertake in order to ensure fiscal prudence, transparency and accountability in the delivery of services.”


Source: Joy Business