News Guide Africa

Tag: International Development Association (IDA)

  • ADI Calls for Stronger Ghana–Germany–KfW Partnership to Drive 24-Hour Economy through Agriculture, Agro-Processing, and Renewable Energy

    ADI Calls for Stronger Ghana–Germany–KfW Partnership to Drive 24-Hour Economy through Agriculture, Agro-Processing, and Renewable Energy

    The Alliance for Development and Industrialization (ADI) is urging the Government of Ghana to deepen collaboration with the Government of Germany and the KfW Development Bank, a member of the International Development Association (IDA), to accelerate the nation’s 24-Hour Economy through agriculture, agro-processing, and renewable power development.

     

    According to ADI, Ghana’s 24-Hour Economy concept designed to boost industrial productivity and job creation can only be achieved sustainably when backed by reliable, low-cost, and renewable energy sources such as solar and biofuels, and supported by robust agro-industrial value chains.

     

    “Germany and KfW have long been central to Ghana’s development story,” said Dr Richard Mensah, Convenor of ADI. “They have helped modernize our agricultural sector, strengthen technical and vocational education, and establish key institutions such as the Development Bank Ghana (DBG) and the Outgrower and Value Chain Fund (OVCF). These are the right partners to lead Ghana’s next growth phase under the 24-Hour Economy.”

    ADI is advocating for the expansion of Germany’s successful KfW OVCF programme, which has already provided innovative financing and support to smallholder farmers and agribusinesses. The organization proposes broadening this initiative to cover key high-potential commodities that can drive industrialization and export growth specifically:

    Palm and Coconut – for edible oils, cosmetics, and renewable biofuel production.

    Citrus and Tropical Fruits – for juices, concentrates, and processed exports.

    By-products and Waste – for organic fertilizers, feed, and bioenergy.

    The expansion, ADI says, should include value addition, processing, and export linkages, ensuring farmers and local processors can benefit directly from global markets while creating sustainable jobs.

    For Ghana to operate a 24-hour production and services system, renewable energy must form the base of industrial and rural power supply. ADI highlights that solar farms, distributed mini-grids, and biofuel systems can provide “free and clean” energy to agro-processing zones, cold-chain facilities, and rural industries reducing cost pressures and ensuring continuous operation.

    “The 24-Hour Economy must be powered by renewable and free energy sources that ensure factories, farms, and logistics hubs can operate round the clock,” he added. “This approach will make Ghana’s exports more competitive and environmentally sustainable.”

    Germany remains one of Ghana’s most consistent and effective development partners. Over the decades, German cooperation has spearheaded programs in:

    Agricultural modernization and value chain finance (via KfW and GIZ).

    Technical and vocational education and training (TVET), equipping youth with employable skills.

    Industrial financing through the establishment of the Development Bank Ghana (DBG).

     

    Renewable energy projects, supporting Ghana’s energy transition towards sustainable growth.

    ADI believes that building on this foundation through a formal Ghana–Germany–KfW partnership will create a unified framework to support agro-industrial zones, renewable energy infrastructure, and export-oriented manufacturing.

    ADI is therefore calling on policymakers to prioritize the creation of a Ghana–Germany–KfW 24-Hour Economy Initiative, which would integrate:

    Agriculture and value chain financing expansion through OVCF.

    Agro-processing industrial parks powered by renewable energy.

    Export facilitation for palm, coconut, citrus, and fruit-based products.

    Youth training and enterprise support through TVET-linked programs.

    “Germany and KfW have the expertise, capital, and technology to make Ghana’s 24-Hour Economy a reality,” ADI concluded. “With their partnership, Ghana can transition from raw commodity exports to a renewable-powered agro-industrial nation that operates efficiently, inclusively, and sustainably.”

     

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    About ADI

    The Alliance for Development & Industries (ADI) is a policy and investment platform promoting agricultural transformation, renewable energy adoption, and inclusive economic growth across Africa. ADI is seeking to work with communities, governments, development agencies, and private investors to build sustainable value chains and job-creating enterprises.

  • Target IDA for cheaper loans

    Target IDA for cheaper loans

    As part of its mandate in helping to shape the economic direction for growth of member nations, the World Bank has advised Ghana’s government to lean more on concessional external financing from institutions such as the International Development Association (IDA) rather than depending heavily on expensive domestic borrowing to finance capital projects.

    It asserts that, concessional IDA loans provide far more favourable terms than domestic Treasury-bill borrowing.

    Comparatively, using the short-term domestic financing market (T-bills), government’s financing cost an average interest rate of 27.4% between 2023 and 2024, while IDA regular and blended financing attracted interest and service fees between 0.75% and 2.0%, coupled with extended grace periods.

    “Even with recent declines in average domestic borrowing costs to 11.9% in September 2025, new IDA blend terms offer significantly lower rates at 1.5%, locked in for longer periods”, the Country Director for Ghana, Sierra Leone, and Liberia, Robert Taliercio, emphasised while speaking at the launch of the World Bank’s 2025 Policy Notes in Accra, last week.

    “So it’s an obvious choice in terms of using all IDA available before resorting to further domestic financing.”

    The 2025 Policy Notes outline Ghana’s structural challenges and recommend four strategic foundations for long-term growth and inclusive transformation.

    Most urgently it calls for restoring macro-financial stability through stronger domestic revenue mobilisation, sustainable public finances, and reforms in sectors such as energy and cocoa.

    Ghana’s tax mobilisation, at 13% of GDP in 2021, remains well below both its estimated tax potential of 21% and the Sub-Saharan African average.

    In the first half of 2025, revenue reached 7.1% of GDP against a 7.3% target.

    Consequently, the World Bank has outlined a new set of policy recommendations aimed at helping Ghana achieve long-term economic transformation, with a clear warning that urgent reforms are needed to secure sustainable growth and job creation.

    Despite Ghana’s significant progress made in the past in ensuring just economic development, cutting poverty in half between 1991 and 2016 and recording average growth of 6.8% between 2009 and 2019, in recent years, rising macroeconomic challenges – capped by a severe crisis which erupted in 2022 – have stalled progress.

    World Bank data indicates that, between 2012 and 2023, only 250,000 net jobs were created, mostly in low-productivity sectors.

    The World Bank has warned that without urgent reforms, fiscal pressures will deepen. For example, energy sector shortfalls cost the government US$1.4 billion in 2024, and are projected to reach US$2 billion by 2026 — funds that could otherwise support health, education, or infrastructure.

    Base on this factors, the World Bank in the 2025 Policy Notes outline four key pillars for transformation:

    1. Restore and sustain macro-financial stability by boosting domestic revenue mobilization, tackling fiscal stress, and advancing reforms in the energy and cocoa sectors.

    2. Raise productivity and competitiveness through investments in skills, health, and private sector growth, while reducing bottlenecks such as long business registration times and slow court processes.

    3. Sustain natural resource management and resilience with investments in climate-smart agriculture, agribusiness, and resilient infrastructure to diversify growth.

    4. Strengthen governance and public institutions to rebuild citizen trust and ensure the reforms are effectively implemented.

    However, Mr Taliercio notes that, with ambitious reforms Ghana could triple per capita income by 2050 and move decisively toward upper-middle-income status, adding that, flagship government initiatives such as the 24-Hour Economy and the Big Push could catalyze these reforms if executed effectively. “The choices Ghana makes now can unlock a generation of inclusive, resilient growth,” he said.

    The World Bank pledged its continued support, calling for stronger collaboration between government, the private sector, civil society, and international partners to drive the country’s transformation agenda.

    By Adnan Adams Mohammed

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

  • World Bank disburses US$360 million to support Ghana’s economy

    World Bank disburses US$360 million to support Ghana’s economy

    The World Bank has disbursed US$360 million from its International Development Association (IDA) for Ghana.

    The disbursement is coming under the Second Resilient Recovery Development Policy Financing operation, to support the Government of Ghana’s efforts to restore macroeconomic stability and reinforce the foundations for more sustainable and resilient economic growth for job creation.

    This was after the World Bank board approved the facility in June 2025, which was later ratified by Ghana’s parliament in July, 2025.

    Details of the financial support

    The disbursement was done on 11 September, 2025.

    The disbursement coming under the Second Resilient Recovery Development Policy Operation is part of a broad World Bank engagement for crisis response and resilience in Ghana.

    It is also expected to support the country’s post-crisis economic recovery and long-term resilience.

    Its objectives are to:

    1) Restore fiscal sustainability;

    2) Support financial sector stability and private sector development;

    3) Improve energy sector financial discipline; and

    4) Strengthen social and climate resilience.

    Other areas of support

    According to the World Bank, the specific reforms supported by the programme will promote fiscal discipline and greater domestic revenue mobilisation, enhance the stability of the financial sector and promote private investment for private-sector-led growth.

    It will also support measures to improve the financial sustainability of the energy sector, ensuring efficient management and operations.

    Additionally, the programme will invest in reforms to bolster social resilience and integrate climate-related considerations into public policy, fostering sustainable development.

    The Finance Committee report on July 2, 2025, stated that the loan forms part of a World Bank support package to Ghana, which also includes investment lending and technical assistance.

    It complements earlier budgetary support under the first Resilient Recovery DPF and is designed to reinforce ongoing reforms under Ghana’s IMF programme.

  • World Bank Provides Ghana $360 million to Strengthen Macroeconomic Stability and Lay the Foundations for Resilient Growth

     

     

    The World Bank Board of Executive Directors today approved $360 million from the International Development Association (IDA) for the Second Resilient Recovery Development Policy Financing operation to support the Government of Ghana’s efforts to restore macroeconomic stability and reinforce the foundations for more sustainable and resilient economic growth for job creation.

     

    “The successful implementation of reform actions under the IMF program and the Development Policy Operations

     

    series (DPO) has strengthened macroeconomic stability, restored investor confidence, and laid a solid foundation for sustained economic recovery and inclusive growth. We are confident that the measures supported by this DPO will help our efforts to enhance fiscal discipline and build a more resilient and inclusive economy, capable of withstanding future shocks,” said Honorable Cassiel Ato Forson, Minister of Finance.

    The Second Resilient Recovery Development Policy Operation is part of a broad World Bank engagement for crisis response and resilience in Ghana. Its objectives are to: 1) restore fiscal sustainability; 2) support financial sector stability and private sector development; 3) improve energy sector

     

    financial discipline; and 4) strengthen social and climate resilience.

    “Entrenching fiscal and debt sustainability, improving the business environment to attract investment and create jobs, addressing the long-rooted energy sector challenges, and protecting the most vulnerable – measures supported by this financing – continue to be urgent priorities for Ghana. They are essential steps for the country to revitalize its domestic private sector, build resilience against climate change, and improve the quality of life of its people. We look forward to continuing to support Ghana to accelerate and deepen these reforms going forward.” said Robert Taliercio, Division Director for Ghana, Liberia and Sierra Leone.

     

     

    The specific reforms supported by the program will promote fiscal discipline and greater domestic revenue mobilization, enhance the stability of the financial sector and promote private investment for a private-sector-led growth. It will also support measures to improve the financial sustainability of the energy sector, ensuring efficient management and operations. Additionally, the program will invest in reforms to bolster social resilience and integrate climate-related considerations into public policy, fostering sustainable development.