Ghana selected to benefit from $9m Swiss-World Bank programme for middle-income countries
The World Bank and Switzerland’s State Secretariat for Economic Affairs (SECO) have co-launched a $9 million programme to help eight middle-income countries, including Ghana to cope with external fiscal shocks.
The other countries are Colombia, Egypt, Indonesia, Serbia, South Africa, Peru and Vietnam.
This was announced September 26, 2011 during the annual meeting of the World Bank and the International Monetary Fund in Washington DC, USA.
“The objective of the program is to support selected middle-income countries to better manage their fiscal risks and thus to protect their long term fiscal balances. The program will focus on two major sources of fiscal risk: public debts and natural disasters,” said SECO in a statement on its website.
The statement adds that “It will be implemented together with the World Bank’s Treasury and Financial and Private Sector Development Departments over a period of five years starting in 2011.”
Natural disasters, unexpected macroeconomic shocks or other contingent liabilities are a source of significant fiscal risk, according to SECO.
The World Bank reclassified the economic status of Ghana from a lower income to a low-middle income on July 1, 2011. And the Bank’s classification means Ghana becomes one of the developing countries of the world where average per capita income ranges between $1,006 to $3,975.
In November 2010 the Ghana Statistical Service (GSS) rebased the country’s economy and indicated that the country’s per capita was $1,343 with a GDP value of $32.5 billion.
Revenues from oil and the performance of Ghana’s main exports; cocoa and gold have supported the economy’s growth.
As a middle income country, Ghana has progressed to a state requiring less Overseas Development Assistance (ODA) which now accounts for about 42% of the national budget, making Ghana a donor dependent country.
However, with Ghana’s status as middle income country, donor support has been dropping, a situation which inevitably would put a strain on the country’s economy.
By Emmanuel K. Dogbevi & Ekow Quandzie