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Over US$1bn World Bank Funds Untouched
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Ghana has failed to utilize US$1.18billion out of US$1.52billion made available to the country by the World Bank to finance some infrastructural projects.

Out of the funds committed to Ghana, only US$350.1million has been utilised which means that only about 23 percent of the funds have been disbursed. Interestingly, government officials will be participating in the World Bank/IMF Annual meetings where the board of governors of the two institutions will be made to report on their various activities.

Ghana has serious infrastructural challenges, and it is estimated that about US$500million is needed annually to bridge the gap. While these funds are yet to be disbursed, government has contracted a US$3billion Chinese loan which was recently approved by Parliament. While the loan from the China Development Bank is non-concessionary, funds provided by the World Bank are chiefly on concessionary terms and attract very low interest rates and significant grace periods.

Dr. Dante Mossi, Senior Country Officer, World Bank Accra Country Office, in a response to a question by the B&FT on what accounts for the low disbursement of the Bank's funds by the government, said: “The Government of Ghana has about 28 operations in Ghana in several sectors. Some of them are more challenging than others.

“For example, our portfolio for energy, water and sanitation has had good performance; however, the transport sector projects have suffered because of delays in preparing bidding documents, processes in which there was not enough competition, etc. However, that is our mission, to strengthen the institutions so they can learn how to use better our resources to finance Ghana's priorities.”

On the question of what happens to the undisbursed funds since the majority of the projects are approaching their revenue closing-dates, he replied: “When a project approaches its closing, there are several options. If there is a reasonable expectation that the project can achieve its development objective in a reasonable amount of time, usually less than two years, the project can be extended. If not, the government can elect to cancel undisbursed funds, which can be recommitted to other new or existing projects.”

He said the low disbursement won’t have an adverse effect on the relationship between the Bank and Ghana in a situation where these funds go undisbursed. “The relationship between the World Bank and Ghana is a long-term relationship that began with the independence of Ghana, and the first loan was for the Akosombo dam. The World Bank is Ghana's partner in development, and having undisbursed funds indicates that our effort to strengthen institutions should continue, to assure the best human resource at these agencies.

“Ghana has identified many challenges and, as you mention, infrastructure is one of the bottlenecks for developments. Early studies indicate that the need to build-up Ghana's infrastructure is way beyond what the World Bank can provide, and that is why we are working with the government to strengthen their capacity and open up to other alternatives such as the new opportunities with the private-sector (in public-private partnerships, PPP), or even to handle their own tax-base and resources to finance these needs. In short, infrastructure is one of those factors, among others, that would ease the provision of public services to the poor, particularly those under-served, and that is why we are working together with Ghana in this sector.”

On the question of whether some of the conditionalities attached to the facility might have accounted for the Ghanaian authorities’ inaction, he said the Bank attaches a lot of flexibility to the use of investment funds in the countries in which it works.

“The World Bank attaches a lot of flexibility to the use of investment funds in the countries in which it works. There are rules about the transparency and efficient use of our resources -- and the delay in using the funds provided from the World Bank means delays in the poor being served.

“The resources of the World Bank in Ghana are targetted to help the poor, make the economy more efficient and diverse, generate wealth, empower deprived zones, help with challenges in agriculture, fisheries, oil and gas industry, vocational education, public finances, small and medium enterprise development, among other sectors. We work regularly with our counterparts in government to make sure these challenges are dealt with in a common, satisfactory way.”
Source: B&FT

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