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Overview

  • Ghana sits on the Atlantic Ocean and borders Togo, Cote d'Ivoire, and Burkina Faso. It has a population of about 29.6 million (2018). In the past two decades, it has taken major strides toward democracy under a multi-party system, with its independent judiciary winning public trust. Ghana consistently ranks in the top three countries in Africa for freedom of speech and press freedom, with strong broadcast media, with radio being the medium with the greatest reach. Factors such as these provide Ghana with solid social capital.

    President Nana Akufo-Addo’s recent re-election after the Supreme court dismissed the opposition’s election petition, gives the governing New Patriotic Party a second term.

    Recent Economic Developments and Outlook

    Ghana’s economy contracted by 3.2 and 1.% in the second and third quarters of 2020, respectively, pushing the country into a recession for the first time in 38 years.

    However, a modest growth of 1.1% is for the full year of 2020 thanks to a strong 4.9% growth in the first quarter of 2020, at the onset of the COVID-19 crisis. The 1.1% GDP growth in 2020 is a steep fall from the pre-COVID-19 levels of 6.5%.

    The Government attempted to mitigate the pandemic’s impact on households and businesses by enacting the Coronavirus Alleviation Plan (CAP) and the medium-term COVID-19 Alleviation and Revitalization of Enterprises Support (CARES) program in mid-2020. But the low growth in 2020, coupled with high population growth, has pushed real per capita incomes 1% lower than in 2019.

    Ghana’s economy showed early signs of recovery in the second half of 2020 as business sentiments improved with the ending of lockdowns as the year-on-year performance in the agriculture, manufacturing and tradable services sectors saw some strong recoveries in the third quarter of 2020.

    Government financing needs increased substantially during the pandemic, pushing the Government to resort to central bank financing, resulting in sharp increases in debt and debt service cost. Fiscal pressures arose from costly financial sector reforms in 2018-2020 and the Energy Sector Recovery Program (ESRP), started in 2019. The overall fiscal deficit, including energy and financial sector costs, was therefore already elevated at 7.6% of GDP in 2019 and the debt-to-GDP ratio at 63.9%.

    In 2020, the COVID-19 crisis led to the suspension of the fiscal rule as the fiscal deficit (including financial and energy sector costs) reached 16.2% of GDP and public debt 76.1% of GDP. While debt remains sustainable, the April 2020 Debt Sustainability Analysis (DSA) concluded that Ghana remains at high risk of debt distress. Ghana’s current account deficit widened to 3% of GDP at the end of 2020 from 2.9% in 2019, reflecting a lower trade surplus and higher services out-flows. However, stronger remittance in-flows and lower net investment income outflows, especially from the extractive sector, helped moderate the impact on reserves.

    Outlook: The medium-term negative impact of the pandemic on growth will continue to be felt through low external demand, lower foreign direct investment and tourism receipts. Initial, baseline assumptions of low commodity prices, particularly of oil, led to growth projections of 1.4 % in 2021 and further to 3.6% by 2023 (average of 2.2% for 2021-2023). However, recent rapid recoveries of oil prices complimented by the expected implementation of the Ghana CARES Program will likely result in the realization of the upside scenario with 2021 projected growth of 4.2% and a medium term (2021-2023) average growth of 4.5%.

    With relative stability in the exchange rate and the central bank’s gradual return to a tighter monetary policy stance, inflation is expected to moderate to the central bank’s target range. The fiscal and current ac-count balances are expected to improve only slowly over the medium term, largely reflecting adverse external factors and a slow return to normalcy in domestic revenue mobilization. Against this backdrop of economic slowdown and new restrictions, poverty is likely to continue to rise in 2021 to 30.9% before declining as private consumption growth recovers.

    Risks and Challenges: The two major short-to-medium term risks are health related. First, risks from the second pandemic wave are already affecting some African countries with more virulent variants of the COVID-19 virus. There has been a sharp rebound in cases in Ghana requiring further restrictions.

    A fast vaccine rollout could help mitigate this risk. Secondly, the Ebola outbreak in Guinea in mid-January poses significant health and economic risks for Ghana given the very porous land borders. Ghana’s fiscal position is also a major risk factor with rising domestic and external debt, including Eurobonds.

    Last Updated: Apr 15, 2021

  • The World Bank Group's Country Partnership Strategy (CPS) FY2013-2018  as extended by the November 2016 Performance and Learning Review, ended in 2018. The CPS' objective was to assist the government to sustain economic growth, accelerate poverty reduction, and enhance shared prosperity in a sustainable manner.

    Lessons from the CPS and the 2018 Systematic Country Diagnostic (SCD) will inform a new Country Partnership Framework (CPF) which seeks to help Ghana consolidate its economic transition to the status of a lower-middle-income country by addressing sources of inequality, improving human capital services, building stronger economic and management institutions, increasing agriculture productivity and improving the business climate for industrialization. The CPF under preparation is based on three pillars:

    ·        Improving equitable access to services for improved human capital development;

    ·        Enhancing conditions for diversified growth and quality jobs; and

    ·        Promoting resilient development.

    These are anchored in the Ghana Coordinated Program of Economic and Social Policies Agenda, which include economic development, social development, environmental protection, infrastructure and human settlement improvement, as well as improvement in governance and public accountability and reduction of corruption.

    The World Bank program in Ghana is worth $3.26 billion in credits and grants across 29 projects. Of the total financing, 90% is from IDA (National: $2.713 billion; Regional: $210 million) and the remaining 10% is from sector specific trust funds ($337 million). The portfolio has a balanced spread across all sectors with the largest investments in education (14%), finance & competitiveness (16%) and urban resilience (9%). Financing in the remaining sectors range from 2-8%.

    Cross-cutting themes are the development of new markets, the creation of jobs, and skills development. Sector specific trust funds have been instrumental in financing innovative programs on sustainable land and forest management, promoting emissions reductions, and increasing the viability of climate or “green” oriented businesses.

    Multilateral Investment Guarantee Agency (MIGA) Operations

    MIGA is a member of the World Bank Group. Its mandate is to promote cross-border investment in developing countries by providing guarantees (political risk insurance and credit enhancement) to investors and lenders.

    MIGA currently insures four active projects in Ghana, supporting power, telecoms, clean water, and oil and gas supply, with total active gross exposure of $448.2 million.

    International Finance Corporation (IFC) Country Strategy and Operations

    IFC, a member of the World Bank Group, aims at advancing economic development by encouraging the growth of private enterprise in developing countries.

    Its strategy in Ghana focuses on supporting economic growth and diversification through agribusiness, manufacturing, and expansion of access to finance. As of February 2021, IFC’s investment portfolio was $1.6 billion in financing and advisory services for agribusiness, education, energy, financial services, health, manufacturing, real estate, transport, tourism, and other sectors in Ghana.

    In addition, IFC has provided technical assistance to the Government of Ghana on improving the investment climate and trade logistics. On financial inclusion, it has supported the Government of Ghana with creating the optimal environment for digital financial services/mobile banking and implementing financial infrastructure (such as a credit bureau and collateral registry) to encourage banks to lend to small and medium size enterprises (SMEs).

    IFC’s key activities in Ghana since the beginning of the pandemic include a rapid assessment of the impact of the pandemic on the private sector and over US$85.7m investments in Health, Agribusiness, SME lending, and Manufacturing.

    Last Updated: Apr 15, 2021

  • The Greater Accra Metropolitan Area (GAMA) Water and Sanitation project has increased access to household sanitation in the GAMA area by supporting the construction of 27,242 household toilets to serve over 217,936 people at the end of October 2020. It has also under its institutional sanitation component supported the construction of 398 new sanitation facilities and rehabilitated 105 (at 260 different schools). A total of 398 facilities have been completed and handed over as of October 2020. The project has also helped to improve and expand the water distribution network in GAMA to provide people with access to improved water supply to more than 368,000 people as against 250,000 people living in low income communities through 281 km of distribution pipelines, and also provided 10,200 new service connections as against 3,500 new service connections. In addition, 114 community standpipes have been constructed in low income communities.

    The Ghana Commercial Agricultural Project which is to improve agricultural productivity and production of both smallholder and nucleus farms has to-date benefited 14,264 farmers ahead of a target of 14,000 of which 4876 are women representing 105% of a target of 4200. The project helped farmers to meet and surpassed the target for yield of maize, rice (under rainfed conditions) and soya in the Savannah Accelerated Development Authority (SADA) zone. The area under formal commercial arrangements in the SADA zone (including out grower) was  5,945.80 hectares in 2020 which is higher than end project target of 5,500 hectares. The total area provided with improved irrigation and drainage services is  6,047.38 hectares as of December 31, 2020 and comprised 1,167.38 and 4,880.00 new and rehabilitated hectares respectively.

    With support from the Secondary Education Improvement Project (SEIP), Ghana has increased the number of seats available to students in senior high schools in underserved districts by at least 43,000 seats and provided over 20,000 low-income students with scholarships/bursaries between 2014 and 2019. It has since 2014, helped deliver quality secondary education to nearly 568,000 children in Ghana. The project has provided scholarship and bursary support to over 20,000 children, 60% of whom are girls. SEIP has contributed to an increase in transition rates from lower to higher secondary schools in the poorest districts from 39% in 2014 to 72% in 2019, and more than doubled improved learning outcomes for girls. There has been an increased in the completion of higher secondary education in the two poorest quintiles in the targeted districts from 8.4% in 2014 to 13.5% in 2017.

    The proportion of students scoring six credits and above in the West African Senior School Certificate Examination exit examination in targeted schools was 23.3% in 2019, up from 10.7% in in 2014. The proportion of girls scoring six credits and above was 22.8% in 2019, representing a 13% age point increase during the same period.

    Twenty-one new senior secondary schools have been constructed and 125 rehabilitated, increasing the number of spaces available in targeted schools by 43,000 seats between 2014 and 2020.

    With the onset of the COVID-19 pandemic, the government rolled out the iCampus nationally which allows all SHS students to access learning modules online. I-Boxes –which provide offline access to a range of curriculum-based video lessons, quizzes, virtual laboratories, and summary notes­– have also been installed in all beneficiary secondary schools, including newly constructed ones. This in 2020 enabled at least 1.1 million senior secondary school students in Ghana were provided logins to I-Campus (online learning platform) modules.

    The Ministry of Education and Ghana Education Service (GES) are collaborating with Ghana Telcos to zero-rate educational content. Digitized materials developed were also broadcasted on GES TV. 

    Last Updated: Apr 15, 2021

  • The World Bank country program in Ghana was coordinated with other development partners through the preparation of the Systematic Country Diagnostic (SCD).  

    The consultations brought together partners in civil society, development partners, academia, the private sector and government. Similar partnerships were demonstrated during the preparation of the Ghana: Policy Agenda for Growth and Shared Prosperity. Partners reviewed their development plans and revamped the architecture for donor coordination and dialogue to recognize the emerging importance of the private sector and newer, non-traditional partners.

    G20 Compact with Africa

    Launched in March of 2017 under Germany’s presidency of the G20, the Compact with Africa (CWA) is the central pillar of the G20-Africa Partnership and its mission to support private investment, sustainable infrastructure, and employment in African countries. The Compact has 12 members: Benin, Burkina Faso, Côte d’Ivoire, the Arab Republic of Egypt, Ethiopia, Ghana, Guinea, Morocco, Rwanda, Senegal, Tunisia, and Togo

    Last Updated: Apr 15, 2021

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LENDING

Ghana: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments

MULTIMEDIA



PHOTO GALLERY

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In Depth

Mar 31, 2021

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Additional Resources

Country Office Contacts

Main Office Contact
Independence Avenue
King Hassan Rd, Plot no. 3
Ridge, Accra, Ghana
+233-30-221-4100
For general information and inquiries
Kennedy Fosu
External Affairs Officer
+233-30-221-4142
kfosu@worldbank.org
For project-related issues and complaints
ghanaalert@worldbank.org