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UN Office for the Coordination of Humanitarian Affairs

GHANA: World Bank commits US $ 1 billion to development

ABIDJAN, 20 January 2004 (IRIN) - As work began on a new stretch of road that will improve Ghana’s infrastructure links with neighbouring Burkina Faso, World Bank Country Director Mats Karlsson revealed that his institution had committed a further US $ 1 billion to projects, including road building, in Ghana.

Karlsson made the announcement at a so-called ‘sod cutting ceremony’ in the Volta Region in eastern Ghana. The ceremony marked the beginning of the construction of another badly needed road to improve north-south access.

Road building is essential to Ghana’s economic development, which donors such as the World Bank continue to support. However, it is not happening as fast as most stakeholders would like.

The West African nation has about 32,250 kilometres of roads, of which about 12,000 kilometres are main roads yet only around 6,000 kilometres are paved. The remainder are dirt roads, at best graded and levelled by machines.

The one billion dollars, said Karlsson, would be available to support health, education, water and other projects, including road building, that would improve socio-economic conditions in the country.

The money will be made available over a four-year period. A World Bank employee, who declined to be named, said the funds could be dispersed over more than four years subject to the efficiency of the Ghana government.

Government action plans are typically derailed in election years, and with legislative and presidential polls due to be held this coming December, the World Bank’s commitment could well stretch out beyond the planned cut-off date of 2007.

Stability dividend

Donors’ substantial show of support for the government of Ghana is a reflection of the country’s reputation as a bedrock of stability in a troubled region.

Neighbouring Cote d’Ivoire, once the economic success story in West Africa, now flounders in chaos that has gripped the country since a rebellion broke out in September 2002. Though Liberia and Sierra Leone are emerging from protracted civil wars, their bloody conflicts have cast a shadow over the entire region.

Gerhard Schroeder, the German Chancellor, is also showing his country’s support for Ghana this week. Schroder is making a four-nation tour of the continent and it is no surprise that Ghana is one of those chosen for a visit.

Bilateral and multilateral donors have already sunk billions of dollars into Ghana with a view to spurring its much hoped-for economic takeoff.

“The way we see Ghana,” says Jan Randolph Chief Economist at World Markets Research Centre, a London-based business intelligence group, “is that the World Bank and IMF have staked their reputation on making a success of Ghana.”

“The donors have had a lot more leeway in policy-making matters in Ghana than in any other African country”, said Randolph. “As a result, they have put their reputation on the line. If Ghana fails then it throws a question mark over donor policy throughout Africa.”

Indeed, results on paper look encouraging. According to the IMF, GDP growth has been consistently around the 4-percent mark each year for the last 10 years, while inflation has remained in single digits.

Yet despite the donors’ millions, the IMF estimates that average income per capita in Ghana will be US $ 385 this year, almost half that of Senegal, also considered a bastion of democracy in West Africa.

Poor roads hinder development

According to John Mahama, member of parliament for the Bole/ Bamboi Constituency in north-eastern Ghana, road building is a “critical” element in speeding up Ghana’s progress.

There is no tarred road linking Bole/ Bamboi with the south of the country. In fact, the road is so bad that the State Transport Company, which runs the national bus service, last week threatened to end its service to Bole unless something was done about the potholed dirt roads.

Mahama said the threat was a real one, and would leave his constituents stranded. The bus company had withdrawn their service before, “many years ago,” he said, “and for exactly the same reason.”

Mahama complained that the poor state of the nation’s roads was impinging on the potential for economic development in his constituency.

Though Bole/Bamboi is one of the most fertile regions in Ghana, farmers struggle to get their produce, yams, cassava and shea nut, south to market. Similarly, all the region’s petroleum needs have to be supplied via tankers that laboriously crawl along the bumpy tracks.

In the rainy season, whole sections of the road become impassable to all but the best of four by fours, or the most fearless of drivers.

Until the entire country is accessible trade and development will be hindered. But progress is slow, and existing road development projects in the Bole/Bamboi area are falling behind schedule, said Mahama.

As for the national economy, Randolph believes the World Bank and IMF will do whatever it takes to make sure Ghana continues to produce promising results on paper.

“Ghana is like a deflated balloon with lots of holes in it” said Randolph. “Donors will continue to put money in it and yes, the balloon will go up, but not for very long.”

Themes: (IRIN) Economy



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