The World Bank Group has approved a $300 million funding package to support Ghana’s economy. This choice comes after Ghana recently reached a deal to restructure some of its external obligations with its official creditors, which was completed a little over a week ago.
In an official statement, the international financial institution stressed that this deal is a critical step in restoring the West African nation’s debt sustainability. The authorized funding is intended to assist in executing government initiatives, emphasizing the improvement of domestic revenue mobilization, cost control, and financial sector stability.
In 2023, Ghana experienced one of its worst economic crises, with inflation reaching over 50% at one time. On the other hand, inflation dropped to 26.4% in November 2023. In the first half of 2023, the Cedi also depreciated by more than 11%. Nonetheless, the central bank has managed to control inflation, as the rates fell 8.8% in a single month, from 35.6% in October to 26.4% in November.
Ghana went into virtual default in December 2022 when it stopped making payments on a sizable amount of its $28.4 billion external debt. Still, the nation was able to work out a $3 billion agreement with the IMF. This fund is the first of three $300 million operations that will follow. It is a significant part of the World Bank’s extended engagement in Ghana to address crises and strengthen resilience.
Ghana was paid about $600 million last week as part of the $3 billion International Monetary Fund (IMF) bailout package. In January, Ghana reached a $5.4 billion debt restructuring agreement with its creditors, paving the way for the IMF to disburse $1.25 billion in funding to support its economy.
