World Bank says to lend Ghana $1.2 bln over 3 years
11 Mar 2009 19:39:46 GMT Source: Reuters
* World Bank to loan Ghana up to $1.2 billion interest-free * Bank to front-load $250 million funding * Twin deficits worry ratings agency, investors
(Releads with $1.2 billion interest-free loan package) By Kwasi Kpodo ACCRA, March 11 (Reuters) - The World Bank will extend up to $1.2 billion in interest free loans to Ghana over three years to fund a range of sectors and help the West African country cope with the global economic crisis, the Bank said on Wednesday. "The Bank, which is one of Ghana's leading development partners, indicated its readiness to assist the newly-elected Ghanaian government in any way possible to minimize the impact of the global financial meltdown and economic crisis," the Bank said in a statement. The World Bank's resident representative in Ghana, Ishac Diwan, said the Bank would speed up payments worth $250 million from Ghana's allocation with the Washington-based bank. "The World Bank has agreed with Ghana to front-load $250 million to the government out of Ghana's allocation from the Bank, to enable it to cushion the effects of the crisis," Diwan told Reuters. Earlier World Bank Vice-President for Africa Obiageli Ezekwesili told a news conference the Bank would speed up payments to Ghana, but gave no figure for the funds involved. The new government of President John Atta Mills, who won elections just over two months ago, is facing a cash crunch after spending soared in the final year of the previous administration. That pushed the budget deficit to a provisional 14.9 percent of gross domestic product in 2008 -- a gap the government plans to bring down to 9.4 percent by the end of 2009, according to its maiden budget presented to Parliament last week. Widening budget and current account deficits led ratings agency Fitch to downgrade its outlook on Ghana's 'B+' debt rating to "negative" last week. The current account deficit reached a provisional 20.87 percent in 2008, the budget said. The widening twin deficits have also unsettled some investors holding the gold- and cocoa-producing country's debut Eurobond <374422AA1=RRPS>, which was issued in 2007 and is due in 2017. (Reporting by Kwasi Kpodo; writing by Alistair Thomson)
An inmigrant of Ghana holds a bag on his head during a harvest at a farm in Palos de la Frontera, southwest Spain February 27, 2009. REUTERS/Marcelo del Pozo (SPAIN) ...
