Report No. PIN36
Report No. PIN36
Ghana CAS: Public Information Notice
World Bank Board Discusses
Ghana Country Assistance Strategy
On March 30, 2000, the World Bank's Board of Executive Directors discussed the
Bank Group's Country Assistance Strategy (CAS) for the Republic of Ghana,
covering the period 2000 to 2002. Earlier, on March 23, 2000, during a meeting
of the Committee of the Whole, the Executive Directors had discussed Ghana's
Development Strategy for Poverty Reduction in a videoconference with the
country's authorities.
Country Context
The overriding aim of the Government's economic development program is the
reduction of poverty and general improvement in the welfare of Ghanaians. The
strategy for poverty reduction emphasizes economic growth, integrated rural
development, the expansion of employment opportunities, and improved access by
the poor to basic public services.
The overall trend in poverty during the 1990s has been broadly favorable in
Ghana. The percentage of the population defined as poor has fallen from about
51 percent in 1991-2 to about 43 percent in 1998-99. The decline, however, is
not evenly distributed geographically, the reduction in poverty being
concentrated in Accra and the Rural Forest localities. Some regions (Central,
Northern, Upper East) have experienced increases. Poverty is highest among food
crop farmers, who also gained the least.
Over the past five years, the economy grew on average by 4.4 percent a year.
However, recent declines in the world prices of cocoa and gold coupled with
higher prices for oil, slowed the country's progress to achieve its
macroeconomic and fiscal targets. The economic outlook for 2000-2002 is
challenging and calls for even tighter measures. The Government is committed to
reducing its stock of domestic debt in order to bring down interest payments and
rates and free up credit for the private sector. The Government also hopes to
accelerate privatization of banks and public utilities.
The challenges of poverty reduction are considerable. There is the need to
deepen access of the poor to basic social services and infrastructure. Support
to basic education will be increased. The priorities are to reduce the gender
disparity in enrollments, to target deprived areas for the provision of
educational infrastructure, and to enhance community participation. Promoting
accelerated growth in agriculture is crucial. Programs to increase access to
primary health care facilities and potable water will be strengthened, as will
the Government's response to the HIV/AIDS epidemic. The isolation of poor
communities would be reduced by strengthening economic infrastructure, such as
roads and communications. In implementing the macroeconomic program, care will
be taken to protect expenditures that are of key interest to the poor.
The challenges that Ghana faces in governance are many. The Government intends
to take actions covering all its branches in order to strengthen the capacity of
the state to promote better governance. To show Government's current commitment
to the fight against corruption, a Serious Fraud Office (SFO) has been
established and an anti-corruption work plan has been developed. The thrust of
decentralization policy in Ghana has been to promote popular participation and



ownership of the machinery of Government by shifting the process of governance
from command to consultative processes, and by devolving power, competence and
resources to the district level. There, however, remain many challenges. The
crucial need is to enhance management capacity at the local level.
Bank Strategy
Based on an extensive consultations process, the Bank Group strategy is framed
around three themes. First, higher growth is critical to achieving Ghana's
aims, but growth that brings benefits to a wider group of people. Second,
changing the role of the state continues to be at the heart of the reform
process, even after many years of reform. This means both withdrawal from
activities that the private sector can do better, as well as achieving sharp
improvements in public service delivery. The third leg is improving the
implementation of strategy, particularly with respect to governance and
decentralization, as well as the environment for the private sector.
The proposed IDA lending program totals $490 million over the period FY2001-
2003. The program includes several Adaptable Program Loans. Program lending
(i.e. quick disbursing budget support) represents about a third of the proposed
total value of lending. The volume of IFC investments is difficult to forecast
as it depends on demand which emanates from the levels of private investment.
However, if pending private infrastructure projects proceed, IFC would expect to
double or even triple the current portfolio. These large infrastructure
investments would be complemented by investments in the financial and
competitive sectors such as agribusiness, tourism, and export manufacturing; and
increased activities in IFC small and medium enterprise facilities. Continued
progress in policy reforms and improvements in the regulatory environment for
business would be expected to result in significant levels of MIGA guarantee
activity. Preliminary applications for coverage by MIGA over the last year
include investor interest in telecommunications, services, water, power and
agribusiness, and their indicative investment values range from $10 million to
$80 million.
In addition to lending, the World Bank Group proposes to undertake analytical
work in several areas including non-traditional exports, fiscal
decentralization, poverty, anti-corruption, the financial sector, and
infrastructure.
Partnerships
The Government, in cooperation with donors, has carried out substantial work in
the context of the Comprehensive Development Framework. This process already
has strengthened the Government's role in managing donor resources more
effectively. This work and local donor coordination would continue, with a view
to promoting more rationalization of different donor interventions in support of
the Government's development agenda through more sector-wide, coordinated
approaches. Under the umbrella of the "Mini-CG", some 14 partner groups are now
functioning, and each has prepared a sector status and strategy report. These
were a key part of the documentation for the November 1999 in-country
Consultative Group meeting, and have been published on the Government's CDF
website (www.ghanacdf.org.gh/). A feature of the CDF in Ghana is the close
collaboration of all resident UN agencies. In the next stage of the CDF, the
priorities will be dissemination to and greater involvement of civil society, as
well as building on the CDF for the next phase of development planning.
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