Parliament approves $360m World Bank credit to support budget and clear arrears

By Eugene Davis

Deputy Finance Minister Thomas Nyarko Ampem has announced that the US$360 million credit facility from the International Development Association (IDA) of the World Bank will be used to finance key components of the 2025 Budget, particularly to clear arrears owed to contractors. This facility forms part of the Second Resilient Recovery Development Policy Operation (DPO2).

The funding, which is not tied to any specific project, is part of general budget support to help Ghana recover from its 2022 economic crisis. That crisis—rooted in fiscal deterioration during 2020–2021—was marked by high inflation, rapid cedi depreciation, and unsustainable debt levels. It led the government to seek assistance from the IMF and World Bank under a broader economic recovery programme.

Ghana had initially requested US$900 million under the three-part DPO series. However, DPO2 was increased from US$300 million to US$360 million, and DPO3 is expected to rise to US$400 million, bringing the total package to US$1.06 billion.

The Finance Committee observed that the government has already implemented critical reforms, including efforts to:

• Boost domestic revenue,
• Improve financial and operational efficiency in the energy sector,
• Strengthen the financial sector,
• Build resilience to climate and economic shocks.
• Expected outcomes from the DPO series include:
• Improved revenue collection and financial sector stability,
• Increased private and foreign investment,
• Strengthened energy sector efficiency and reduced fiscal burden,
• Better protection for the vulnerable,
• Enhanced gender equity and climate resilience.
• Parliamentary Reactions

Finance Committee Chair Isaac Adongo expressed support, stating the funds will help stabilize the cedi and drive growth.

Economy Committee Chair Eric Afful said the facility falls within the Appropriation Act and urged bipartisan backing.

Ranking Member Kojo Oppong Nkrumah, however, criticized the Majority for avoiding the term “loan” and warned that the $360 million would add to Ghana’s debt stock. He advised strict adherence to the loan’s objectives.

Minority Leader Alexander Afenyo-Markin accused the government of policy inconsistency and called for full transparency on how the funds are used post-approval.

Meanwhile, Majority Leader Mahama Ayariga assured contractors that disbursement of the funds will bring much-needed relief to the sector.

Deputy Finance Minister Thomas Nyarko Ampem