The Annual Meetings of The World Bank Group and International Monetary Fund which started on October 9, just ended on October 15 and from the meeting, it was circulated that the World Bank is set to provide $300 million in budget support to the country in December 2023. This information was brought to light by insiders familiar with Ghana's program with the World Bank during the Annual IMF/World Bank meetings held in Marrakech, Morocco.
Sources close to the World Bank in Washington DC, USA, have indicated that Ghana has successfully met nearly all the necessary conditions for final approval by the Bank's Board. It is anticipated that the World Bank's Board approval will come shortly after the approval of the second tranche of funds by the IMF Board, which is expected to convene on November 22, 2023, following the completion of the First Programme Review.
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Additionally, the World Bank is also expected to disburse approximately $250 million to Ghana as part of its contribution to the Ghana Financial Stability Fund. This fund aims to assist banks adversely impacted by the Domestic Debt Exchange Programme. The Ghanaian government itself is expected to contribute around $700 million as seed capital for the Fund. According to the Ministry of Finance, the Ghana Financial Stability Fund is scheduled to be operational by the end of October 2023.
Ghana's eligibility for this support from the World Bank is rooted in the successful implementation of various economic reforms aimed at stabilizing the country's economy. In particular, reaching a Staff-Level Agreement with the IMF on the first programme review has played a significant role in influencing the disbursement decision by the World Bank. The Bank has also acknowledged the substantial progress made by Ghana in other programs aimed at restructuring and revitalizing the economy.
In fact, by the end of this year, the World Bank is expected to advance over $500 million to Ghana through budget support and other initiatives. If Ghana secures the anticipated IMF board approval of approximately $600 million in the third week of November 2023, the country could receive a total of more than $1.2 billion from both institutions. Furthermore, the African Development Bank is also expected to extend support once Ghana secures the IMF board approval for the first programme review.
The World Bank has been closely monitoring Ghana's economy and has previously projected a recovery to its full potential by 2025. A report released by the World Bank in July 2023, titled "Price Surge: Unraveling Inflation Toll on Poverty and Food Security," highlighted the need for Ghana to generate sustainable domestic revenue by improving tax incentive regimes and revenue administration.
While the World Bank projected slowed growth in 2023 and subdued growth in 2024, the recent assessment by the IMF after the first programme review suggests that Ghana's economy may exceed the anticipated growth rate of 1.5 percent. Finance Minister Ken Ofori Atta has even expressed optimism, stating that he expects the economy to grow by more than 2.5 percent by December 31, 2023.
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This injection of financial support from the World Bank and potential additional support from the IMF and the African Development Bank holds tremendous potential for Ghana's economic development. It reflects confidence in Ghana's commitment to implementing reforms and its efforts to strengthen the economy. The funds will contribute to addressing various challenges and creating opportunities for sustainable growth and development. Let us celebrate this positive development for the country and eagerly anticipate the positive impact it will have on the lives of Ghanaians.
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