World Bank Support for GhanaWorld Bank Support for Ghana

Challenges and OpportunitiesChallenges and Opportunities

August 2004August 2004

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ContextContext

The Bank and Ghana are beginning a very The Bank and Ghana are beginning a very important period in their partnership important period in their partnership

Over the last 18 months (since the launch of the Over the last 18 months (since the launch of the Ghana Poverty Reduction Strategy (GPRS) the Ghana Poverty Reduction Strategy (GPRS) the Bank has developed an US$ 725 million program, Bank has developed an US$ 725 million program, with projects in areas ranging from education and with projects in areas ranging from education and health, to power, land administration, water and health, to power, land administration, water and sanitationsanitation

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ContextContext

In addition, there is a substantial amount of In addition, there is a substantial amount of donor funds being made available to Ghana, donor funds being made available to Ghana, most of them through direct budget support most of them through direct budget support along with the Bank’s PRSC projectsalong with the Bank’s PRSC projects

Finally, budgetary savings from the HIPC Finally, budgetary savings from the HIPC debt relief will make available around 2 debt relief will make available around 2 percent of GDP over the next 5 years for percent of GDP over the next 5 years for poverty reduction expenditure programspoverty reduction expenditure programs

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World Bank Program for Ghana World Bank Program for Ghana (since GPRS)(since GPRS)

PRSC 1PRSC 1 128128 PRSC 2PRSC 2 127127 Health SectorHealth Sector 90 90 Education SectorEducation Sector 78 78 Power Distribution (restructuring) Power Distribution (restructuring) 15 15 Community-Based Rural DevelopmentCommunity-Based Rural Development 60 60 Small Town Water and SanitationSmall Town Water and Sanitation 26 26 Urban WaterUrban Water 103103 Urban Environmental SanitationUrban Environmental Sanitation 62 62 Partnerships with Traditional Authorities Partnerships with Traditional Authorities 5 5 GEF Community Nat Resources MgmtGEF Community Nat Resources Mgmt 1 1 HIV/AIDS Treatment Acceleration PlanHIV/AIDS Treatment Acceleration Plan 10 10 Land AdministrationLand Administration 20 20  

TotalTotal US$ 725 million US$ 725 million

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Poverty Reduction Support Credits Poverty Reduction Support Credits (PRSCs)(PRSCs)

Accounts for 40% of the Bank program in GhanaAccounts for 40% of the Bank program in Ghana US$ 250 million from the Bank in 2003 and 2004, US$ 250 million from the Bank in 2003 and 2004,

plus another US$ 300 from the other donorsplus another US$ 300 from the other donors Provides funding for overall government Provides funding for overall government

operations, supporting wide-ranging reforms in operations, supporting wide-ranging reforms in areas such as education, health, public financial areas such as education, health, public financial management, energy, forestry, water and sanitationmanagement, energy, forestry, water and sanitation

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Poverty Reduction Support Credits Poverty Reduction Support Credits (PRSCs)(PRSCs)

Expected resultsExpected results

Allow the Government to increase total poverty-Allow the Government to increase total poverty-related expenditures by 3 percent annually through related expenditures by 3 percent annually through 2007 2007

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Poverty Reduction Support Credits Poverty Reduction Support Credits (PRSCs)(PRSCs)

ChallengesChallenges

Budget support requires fiscal discipline Budget support requires fiscal discipline and ability to control how funds are spentand ability to control how funds are spent

OpportunitiesOpportunities PRSCs provide direct budget support, PRSCs provide direct budget support,

placing the government in the driver’s seat placing the government in the driver’s seat of the development processof the development process

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Health Sector ProgramHealth Sector Program

The health sector SWAp accounts for 40 percent of The health sector SWAp accounts for 40 percent of overall expenditure on health, or over 500 billion overall expenditure on health, or over 500 billion cedis per annumcedis per annum

In addition, the Ghana AIDS Response Fund In addition, the Ghana AIDS Response Fund provides support to programs aimed at reducing provides support to programs aimed at reducing the spread of HIV infection, and impact of AIDS the spread of HIV infection, and impact of AIDS on those infected and their familieson those infected and their families

The Ghana AIDS strategy involves working with The Ghana AIDS strategy involves working with over 1,000 community based organizations in over 1,000 community based organizations in implementing these programs implementing these programs

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Health Sector ProgramHealth Sector Program

Expected resultsExpected resultsReduce regional, socio-economic and Reduce regional, socio-economic and

gender inequalities in health outcomesgender inequalities in health outcomesKeep the prevalence of HIV among Keep the prevalence of HIV among

pregnant women below 5 percentpregnant women below 5 percent

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Health Sector ProgramHealth Sector Program

ChallengesChallengesRetain qualified health care professional in Retain qualified health care professional in

the deprived areasthe deprived areasReduce recent increase in infant and under Reduce recent increase in infant and under

five mortality ratesfive mortality ratesCross sectoral issues that affect health Cross sectoral issues that affect health

outcomes, such as child malnutrition and outcomes, such as child malnutrition and access to safe water and sanitationaccess to safe water and sanitation

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Health Sector ProgramHealth Sector Program

OpportunitiesOpportunitiesNew formula based budget allocation should New formula based budget allocation should

provide additional resources to deprived provide additional resources to deprived areasareas

It should also increase local control of It should also increase local control of available resources and allow closer available resources and allow closer management of human resourcesmanagement of human resources

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Education Sector ProgramEducation Sector Program

Education sector projects account for Education sector projects account for almost one-quarter of Bank lending to almost one-quarter of Bank lending to Ghana, including untied budget supportGhana, including untied budget support

Programs supported include the National Programs supported include the National Functional Literacy project, the education Functional Literacy project, the education component of the Partnership with component of the Partnership with Traditional Authorities project, and the Traditional Authorities project, and the recently approved Education Sector Project recently approved Education Sector Project

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Education Sector ProgramEducation Sector Programexpected resultsexpected results

1990 2002/2003 2005/2006 Target 2015 MDGs

Gross primary enrolment (%)

National 79 81 88.5 100

Female n.a. 78 88.5 100

Deprived Regions Northern Region

n.a.

68

70

100

Upper East Region n.a. 72 79 100

Upper West Region n.a. 70 73 100

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Education Sector ProgramEducation Sector Program

ChallengesChallengesRetain qualified teachers in the deprived Retain qualified teachers in the deprived

areasareasDeliver core text books to primary pupils in Deliver core text books to primary pupils in

depriveddeprived Increase resources for non-salary Increase resources for non-salary

expenditures, since most of the resources expenditures, since most of the resources (90 percent) goes for teachers salaries(90 percent) goes for teachers salaries

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Education Sector ProgramEducation Sector Program

OpportunitiesOpportunitiesElimination of school fees in deprived areas Elimination of school fees in deprived areas

should increase enrollment ratesshould increase enrollment ratesNew budget allocation formula should New budget allocation formula should

increase funding available for deprived increase funding available for deprived areas and ensure predictability of funding areas and ensure predictability of funding for everyonefor everyone

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Water Supply and SanitationWater Supply and Sanitation

Water Supply and Sanitation is a major area of Water Supply and Sanitation is a major area of emphasis for the World Bankemphasis for the World Bank

Lending in 2003-04 alone will reach US$206 Lending in 2003-04 alone will reach US$206 million, accounting for almost 30% of the Bank’s million, accounting for almost 30% of the Bank’s programprogram

Projects provide complete coverage, ranging from Projects provide complete coverage, ranging from large and small towns to rural communitieslarge and small towns to rural communities

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Water Supply and SanitationWater Supply and Sanitation

UrbanUrban RuralRural TotalTotal

WaterWater 300,000300,000 500,000500,000 800,000800,000

SanitationSanitation 116,000116,000 50,00050,000 166,000166,000

Expected Results: People Gaining Access

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Water Supply and SanitationWater Supply and Sanitation

ChallengesChallenges Overall weak public sector capacityOverall weak public sector capacity Lack of expertise in managing water companiesLack of expertise in managing water companies

OpportunitiesOpportunities Private Sector Partnerships Private Sector Partnerships Private Sector Private Sector

InvestmentInvestment Increase local control over these basic servicesIncrease local control over these basic services

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ConclusionConclusion

Ghana and the World Bank are Ghana and the World Bank are beginning a very important moment of beginning a very important moment of their partnershiptheir partnership

The new Bank program provides The new Bank program provides substantial resources both from the substantial resources both from the Bank and from donorsBank and from donors

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ConclusionConclusion

These resources combined with These resources combined with budgetary savings from the HIPC debt budgetary savings from the HIPC debt relief should provide opportunities to relief should provide opportunities to deal with some of the country’s deal with some of the country’s development challengesdevelopment challenges

The greatest opportunity is building The greatest opportunity is building partnerships in implementing this partnerships in implementing this programprogram