The World Bank has declared confidence in Ghana's economy, describing it as resilient with better prospects. "We are all positive and optimistic about the prospects of the economy which has been resilient due to a number of factors such as high commodity prices, good agriculture out-turn, investments in areas as information and communications technology banking and many other areas," the Country Director of the World Bank, Mr. Ishac Diwan, told a section of media men in Accra. He said although there had been a slowdown in government expenditure in order to reduce the higher than expected spending recorded in 2007/2008 which resulted in the twin deficits of fiscal and balance of payments that had led to lower growth rate of the Gross Domestic Product IGDPI, however, there were still growth opportunities in the economy. Mr. Diwan said besides the global economic crisis that had left some countries like the United States and European countries still in depression, Ghana had some self-inflicted shocks arising out of the over-spending, which the government had to rebalance. The Country Director, however, noted that investor confidence in the country was now high as many foreign investors had in the last few months, refocused their radar on the economy. "The government rebalanced the economy with the right speed and the growth rates - real and forecasts - has been relatively good," the country director told a section of the press, sharing his views on some economic events within the bank and the country. The government in January 2009 inherited a fiscal deficit equivalent to 14.5 percent of all the goods and services produced within the country In a year and an excess of merchandise Importation over exports of about 15 percent mainly on account of the high crude oil prices on the international market. This overheating resulted in d number of difficulties including high inflation' which peaked at a little over 18 per cent in December 2009, gross international reserves worsened to about 1.8 months of import cover as of December 2008, while Ghana Cedi fell faster against the major international currencies. The World Bank stepped in to help the government with about US$300 million, with certain agreed action plans. The first tranche of US$150 million was disbursed in June 2009. The support included US$25 million agriculture development support, the Natural Resource and Environment Governance credit of US$10 million; the Sustainable Rural Water and Sanitation Project of US$75 million; as well as the US$225 million for the Transport Sector Project. The other half was only to be disbursed upon the meeting of all action plans by the government. The government has met five out of the six action plans it agreed on with the World Bank that has facilitated the release of US$150 million Economic Governance, and Poverty Reduction credit. However, Mr. Diwan said the bank was working with the government to ensure that effective loans were disbursed quickly. He admitted the piling up lofty conditions on the government of Ghana by the bank that had partly resulted in a below-coverage disbursement of approved funds. Although the World Bank Board has approved about US$750 million worth of project loans to the country since last year, the inability of the government to meet their deadlines on action plans it agreed on with the bank, has resulted in disbursements of only 10 per cent which Country Director, Ishac Diwan admits “is below the average disbursements for sub-Saharan Africa, but it is not too bad.” Mr. Diwan said although the bank's demands on the government were a bit too high, and would be reviewed in future, “the blame for delays for disbursements should be shared between the Bank and the government.” This was because of the low and sluggish performance of public sector, particularly in performing on action plans in time to warrant the disbursements. The GRAPHIC BUSINESS has gathered that after Parliament had approved loans secured from the Bank, it takes technocrats longer periods to prepare the necessary documents, such as Feasibility Studies, Environmental Impact Assessments and procurements plans to access the loans. Accessing World Bank Funds often come with such demands (conditions) to ensure that the monies are purposefully and judiciously spent. Public sector reforms are slow and needs to be improved. The Board has approved about US$750 million in project credit but only US$l00 million has been disbursed, a disbursement rate of about 10 per cent We want to be around 25 per cent" Mr. Diwan said. He said to help improve the below average disbursement rate, the bank was collaborating with the government on a number of fronts - including the bank's own efforts to simplify its rules and adapt them to the country's - to facilitate quick disbursement of loons when they become effective. Loans become effective if they pass through Cabinet and get Parliamentary approval. As of June, the bank had approved a number of new project financing for the country. They include additional US$70 million for the Ghana Energy Development and Access Project, which would help expand electricity to rural and peri-urban areas; an additional US$44.7 million financing for the eGhana project; the approval of US$88.6 million for Social Opportunities Project and the second US$25 million meant for the three-year Agriculture Development Policy Operation. Others include the third Natural Resource and Environment Governance credit of US$10 million; the Sustainable Rural Water and Sanitation Project of US$75 million; as well as the US$225 million for the Transport Sector Project. Going forward, the bank said it would put in about US$350 million to strongly support some four areas that were important for the country to perform better in the coming years. The areas included decentralisation, which the country director said had been talked about at length without far-reaching practical achievements, saying the new project would seek to upgrade the capacity of local level workers, Mr. Diwan said. The bank, he said, would also support the development of the agriculture value chain, with specific interventions such as improving financing plans for agriculture in the country, helping the sector to attract foreign direct investment, developing the distribution and marketing chain as well as forging public private partnerships. The World Bank country director said Ghana was already developing a uniquely new agricultural development model that would again blaze the trail in Africa. The other areas were the development of vocational and technical education in the country as well as urban water supply where World Bank team was already working with Ghanaian experts for a real time delivery. Source: Graphic Business