Use borrowed money effectively – World Bank cautions Ghana
The World Bank Group has urged the government to adopt policies that encourage both domestic and foreign investment.
According to the world bank, such an approach is vital, particularly when countries such as Ghana seek to return to a path of sustained economic growth.
The world bank observed that Ghana, like many other developing countries, is dealing with the effects of the Covid-19 pandemic, rising inflation, and the ongoing conflict in Ukraine, which is pushing up food and fuel prices.
According to the World Bank’s latest Africa Pulse report, global financial conditions have tightened, and foreign credit flows into Sub-Saharan Africa have decreased. In addition to the aforementioned difficulties, Ghana’s debt situation has deteriorated, with the total public debt stock reaching GH351.8 billion in December 2021.
During the opening press conference of the 2022 Spring Meetings of the World Bank and the International Monetary Fund, World Bank Group President David Malpass spoke on Ghana’s current circumstances and called for growth-oriented policies that will attract private sector investments.
He stressed that “Countries should put in place policies that are strong that attract local and foreign investment. It’s very important for such policies to be growth policies. There’s been a tendency to have too much emphasis on government-led investment which doesn’t add to the competitiveness and productivity that is needed”.
“On Eurobonds, its important countries use proceeds effectively now after they borrow. The borrowed money needs to be used very effectively. And my worry is that hasn’t been the case in certain countries and they are left with unsustainable debt,” he added.
