Accra, Ghana//-The World Bank Division Director for Ghana, Liberia and Sierra Leone, Robert Taliercio, has advised Ghana’s government to prioritise concessional external financing from International Development Association (IDA) and other institutions rather than relying heavily on expensive domestic borrowing to fund capital investments in the West African country, which is currently on a $3 billion IMF programme.
According to him, short-term domestic financing (T-bills) attracted an average interest rate of 27.4 per cent in 2023–2024, whereas IDA regular and blend financing carried interest and service fees between 0.75 per cent and 2.0 per cent, coupled with extended grace periods.
Mr Taliercio advised on the launch of the World Bank Group’s 2025 Policy Notes, dubbed ‘Transforming Ghana in a Generation’, in Accra on Wednesday, September 24, 2025.
He continued: “Even with recent declines in average domestic borrowing costs to 11.9 per cent in September 2025, new IDA blend terms offer significantly lower rates at 1.5 per cent, locked in for longer periods. So, it is an obvious choice in terms of using all IDA available before resorting to further domestic financing”.
The World Bank’s divisional director emphasises that concessional IDA loans offer far more favourable terms compared to domestic Treasury-bill borrowing.
The 2025 Policy Notes threw more light on Ghana’s structural challenges and proposed four strategic foundations to drive long-term growth and inclusive transformation.
The first strategic foundation is restoring macro-financial stability through enhanced domestic revenue mobilisation, sustainable public finances, and reforms in critical sectors such as energy and cocoa. Ghana’s revenue mobilisation, at 13 per cent of GDP in 2021, remains well below its estimated tax capacity of 21 per cent and the Sub-Saharan African average. Revenue for the first half of 2025 reached 7.1 per cent of GDP against a 7.3 per cent target.
The second involves raising productivity and competitiveness by strengthening human capital and creating a more business-friendly environment. Systemic bottlenecks identified include lengthy business registration processes (57 days for domestic firms compared to 28 in Morocco) and protracted litigation timelines (900 days versus 225 in Côte d’Ivoire).
The third has to do with promoting sustainable natural resource management and resilience, with emphasis on climate-smart agriculture, agribusiness, and resilient infrastructure to address environmental degradation and boost productivity.
The fourth strategic foundation requires strengthening governance and public institutions to ensure reforms are effectively implemented and restore citizen trust in the state.
Presenting an overview of the report, Stefano Curto, Lead Economist for Ghana, Liberia and Sierra Leone and Lead Author, said implementing these priorities decisively would be critical to achieving broad-based economic growth, job creation, and shared prosperity for Ghanaians.
This is the link to the full policy notes file:///Users/masahudu/Downloads/PPT%202025%20GHA%20Policy%20Notes%20Overview_Template_Sept-24_Main%20Launch%20FINAL.pdf
