Announcement of World Bank Supports Ghana Poverty Reduction Strategy with United States (U.S.) One Hundred Twenty-Five Million Dollars on June 25, 2003

World Bank Supports Ghana Poverty Reduction Strategy With US$125 Million Media Contact: Eric Chinje Tel: (202) 458-8418 Email:Echinje@worldbank.org WASHINGTON, June 25, 2003 -- The World Bank will provide SDR 90.8 million (about US$128 million) to Ghana to support the government’s efforts to promote economic growth, create jobs and improve health and educational services in the country. US$38 million of this facility, known as the Poverty Reduction Support Credit and Grant (PRSC), is in the form of a grant, while the remaining US$90 million* is based on the standard lending terms of the International Development Association (IDA), meaning there will be a ten-year period of grace and 40 years during which the non-grant component has to be paid back at zero interest. During the preparation of the PRSC, development partners made considerable progress on harmonizing support to the Ghana Growth and Poverty Reduction Strategy (GPRS) implementation, through the Multi-Donor Budget Support (MDBS) initiative. The new grant and credit are part of the World Bank’s support for the GPRS. While work is still going on towards full convergence of overall donor support, a common platform and a framework for common reviews have been agreed. Being part of the World Bank’s contribution under MDBS to Ghana, the entire amount will be disbursed in one tranche within the next one month to support the implementation of agreed poverty reduction reform programs stipulated in the GPRS and the 2003 budget. The reform programs are grouped into three broad areas – (i) Promoting Growth, Incomes and Employment (ii) Improving Service Delivery for Human Development and (iii) Improving Governance and Public Sector Reform. Stressing the importance of effective implementation and monitoring to the success of the programs, Hon Osafo Maafo, Minister of Finance and Economic Planning notes “…after extensive consultation with all relevant stakeholders, 52 indicators to be monitored were identified. A monitoring and evaluation system that will be used to track the indicators to assess the progress of the implementation of the GPRS has also been put in place… and a quantitative matrix to monitor the PRSC implementation has been prepared.” Among the specific policy areas outlined for implementation are: the improvement of rural sector farm and non-farm growth; increase in access and quality in basic education, particularly in the three most deprived regions; improvement in efficiency and equity of financing education with attention to greater poverty impact; ensuring that sustainable financing arrangements are put in place to protect the poor; expanding supply of energy services in a sustainable manner while protecting the poor; improving trade facilitation; and improving the investment climate. In the area of heath, the key issue of focus is the bridging of the gap in access to quality health care services. To this effect, the exemption policy for supervised child deliveries in 2003 alone is expected to benefit an estimated 170,000 expectant mothers, According to Mats Karlsson, World Bank Country Director for Ghana, “This PRSC is the fourth such facility ever to be approved in all of Africa by the Bank. We're walking the talk. This is a shift into a new paradigm and way of working, away from the conditionality driven structural adjustment into a partnership based framework. We now have to move quickly into effective and efficient implementation.” * The credit is on standard International Development Association (IDA) terms, with a commitment fee of 0.5%, a service charge of 0.75%, and a maturity of 40 years, including a 10-year period of grace. For more information on World Bank Support to Ghana, please visit: www.worldbank.org/ghana