Gov't Receives Us$330 Million for Economic Program, Roads Sector

The World Bank yesterday approved two credits totaling US$330 million for the Republic of Ghana. The credits will assist the new Government's reform programs for increased growth and poverty reduction, and the sustainable and equitable development of the road network throughout the country.

"These are two large and very significant operations for Ghana," said Peter Harrold, World Bank Country Director for Ghana, "which will contribute in a major way to the recovery of the economy in the short term, and to the laying of the foundations for equitable medium term growth."

The US$110 million Third Economic Reform Support Operation Credit will help the Government restore macroeconomic stability and market confidence, while developing an agenda for accelerated growth and poverty reduction. The program will focus on:

Restoring macroeconomic stability and strict governance through: a. reducing the domestic and foreign debt burden by curtailing the fiscal deficit and seeking debt relief under the enhanced Heavily Indebted Poor Countries (HIPC) initiative; b. strengthening the management and control of public expenditures; and c. eliminating the deficit of key public enterprises; ? Reinvigorating the reform process in budgetary management, banking reform and the cocoa sector; and

Supporting the preparation and implementation of the Ghana Poverty Reduction Strategy emerging in the context of a broad participatory consultation process, which is targeting the regions and sources of poverty that were identified by the recently completed Ghana Living Standards Survey.

Through the program, the Government can carry out its reform program with less adverse impact on the poor and reinforce the basis for growth and poverty reduction.

The US$220 million Road Sector Development Program will support the Government's national program to address the inefficiencies and deficiencies in the roads and transportation sector. The objectives of the program are to enable the government to:

Ensure sustainable funding for the road sector, through investments that are based on sound socio-economic and environmental principles;

Enhance the operational efficiency of the road network to promote economic growth and the delivery of social services;

Achieve poverty reduction and national integration by reducing socio- economic, gender and regional disparities;

Develop the capacity of government institutions and the private sector to manage the network efficiently;

Develop a comprehensive road safety program to reduce road transport fatalities; and

Create an efficient transport system by integrating the road network with other modes of transport.

The Road Sector Development Program and Third Economic Reform Support Operation will be financed by US$220 million and US$110 million credits respectively, from the International Development Association, the World Bank's lending arm for the poorest countries. The IDA credit is on standard terms of 40 years maturity including 10 years grace.

Contacts: Nina Vucenik, News Bureau Office of Media Relations, The World Bank Group. Tel: (202) 458-7321. Fax: (202) 614-1557

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