The World Bank is working to provide concessional debt, grants and zero interest rate loans through the International Development Association, as sources of financing for Ghana and other countries, President David Malpass has disclosed.
This is part of its post covid-19 strategy to get economies back to life.
“And that’s a high priority, to try to find light at the end of the tunnel so that the people of Africa are not constantly under the burden of unsustainable debt”, the World Bank stressed.
The world has seen a major reduction in interest rates, into zero or even negative for some borrowers. However, for some borrowers in Africa, the interest rates are still high, Mr. Malpass stressed.
“So, one of the questions to creditors and to potential lenders is, are there ways to have much lower interest rates for debt as it is rolled over in Africa”, the World Bank boss quizzed.
Answering a question from Joy Business on the policy recommendation to help deal with the rising debt stock in terms of something that has gotten to threatening levels, Mr. Malpass said “one issue is to try to hold down the non-concessional debt that is being taken on, and non-concessional means higher interest rate debt, because that burdens the future generations.”
Another important step, the World Bank boss said is the transparency of both the debt and the investment projects that might be funded by the debt, adding these are big challenges.
He however said the World Bank and the International Monetary Fund are working closely as they want countries to have sustainable debt burdens rather than unsustainable debt burdens.
The World Bank is also preparing a new Country Partnership Framework in Ghana with the government, and this is an inclusive approach that will ensure the private sector and the civil society.
This will lead to a new country strategy for better investments and results for the Ghanaian population.
The World Bank also commended the country’s progress made so far in poverty reduction.
It however called for its sustenance.