The Board of Directors of the African Development Bank Group has approved a $102.59 million grant in budget support to the Ghana government’s Fiscal Consolidation and Economic Recovery Program, aimed at boosting recent fiscal consolidation and economic recovery reforms.
The program is expected to enhance fiscal consolidation measures in the West African nation and contribute to increasing resource mobilization intended to create more financial capacity for the government’s investments in the country. In addition, it will strengthen the financial sector to attract private investment into critical sectors of the economy, including the agricultural sector. Overall, the program will facilitate the government’s economic recovery reforms through enhanced public finance, increased productivity, and job creation.
The grant, from the African Development Fund, the group’s concessionary lending arm, was approved on Tuesday 31 October. The African Development Fund provides concessional funding for projects and program that promote economic and social development in 37 eligible African countries.
The program will be implemented over a two-year period from 2023 to 2024 by the Ghanaian government in close collaboration with the African Development Bank. It complements an ongoing International Monetary Fund (IMF) Extended Credit Facility to the country.
Abdoulaye Coulibaly, Director of the Governance and Economic Reforms Department of the African Development Bank noted the close collaboration between the institution and the government in the preparation of the grant.
“We have all heard the phrase ‘do not let a crisis go to waste’. We support the efforts of the (Ghana) authorities to take full advantage of the current difficult economic situation to address the fundamental structural weaknesses of the Ghanaian economy,” he said.
Ghana’s economy has been stressed by global developments including the effects of the Covid-19 pandemic, global financial tightening, and Russia’s invasion of Ukraine. These factors have compounded domestic challenges to undermine revenue mobilization and economic growth.
African Development Bank Deputy Director-General for the West Africa region, Joseph Ribeiro, emphasized the need for the Ghanaian government to remain committed to reforms identified in the program. At the same time, he highlighted the Bank’s continued commitment to the country during this critical period.
“The Bank remains steadfast to provide needed support for Ghana under the project and beyond, in line with the country’s development agenda and the Bank’s Country Strategy Paper for Ghana,” Ribeiro said.
Eyerusalem Fasika, Ghana Country Manager, also welcomed the support to the program. “This is a timely intervention that will propel efforts by the government of Ghana to restore macroeconomic stability in the country,” she said.
Emphasizing the critical role of Public Finance Management in achieving fiscal consolidation and economic recovery, she noted, “Public Finance Management is the catalytic force that will drive the government’s different reforms to achieve the common overarching objective of macroeconomic stability and sustainable growth”.