The World Bank Group has called on government to prioritize policies that attract investments from citizens and foreigners.
According to the Bretton Woods institution such an approach is critical especially as countries like Ghana strive to return to a path of sustained economic growth.
Ghana like many other developing countries is dealing with the impact of the COVID-19 pandemic, rising inflation, and the ongoing war in Ukraine, with the latter pushing up prices of food and fuel. The World Bank’s latest Africa pulse report also highlights a tightening of global financial conditions; and reduced foreign financing flows into the Sub-Saharan African region. In addition to the above challenges, Ghana has seen a worsening of its debt position, with the total public debt stock as at December, 2021, hitting GH¢351.8 billion.
The amount is equivalent to 80.1% of Ghana’s Gross Domestic Product, the highest level recorded in recent history. In its attempt to remedy the situation, government has introduced some expenditure rationalization measures as well as revenue mobilization strategies to improve upon its fiscal position.
Commenting on Ghana’s current situation, during the opening Press Conference of the 2022 Spring Meetings of the World Bank and the International Monetary Fund, the World Bank Group President David Malpass called for growth focused policies that will attract private sector investments.
“Countries should put in place policies that are strong that attract local and foreign investment. It’s very important for such policies to be growth policies. There’s been a tendency to have too much emphasis on government led investment which doesn’t add to the competiveness and productivity that is needed.”
“On Eurobonds, its important countries use proceeds effectively now after they borrow. The borrowed money needs to be used very effectively. And my worry is that hasn’t been the case in certain countries and they are left with unsustainable debt,” he added.