The Board of Executive Directors of the World Bank Group has approved a US$45 million loan for the Ghana Public Financial Management Reform Project to assist the country to improve budget credibility.

The loan, offered by the International Development Association (IDA), a subsidiary of the World Bank Group, is also to help strengthen public investment management systems, as well as contain fiscal risks.

The project would improve financial oversight and accountability through the strengthening the capacity of the Ghana Audit Service (GAS) to expand its activities at Metropolitan, Municipal and District Assemblies, as well as build its proficiency to audit Information and Communications Technology (ICT)-based financial information systems.

“Bolstered by high gold and cocoa prices and new oil production, Ghana’s economic growth peaked at 14 percent in 2011, but a combination of external and domestic imbalances contributed to economic instability, fueling government debt and inflation, sharp depreciation of its currency and a weaker pace of economic growth. High levels of debt, large fiscal deficits and lack of fiscal space for public investments are major constraints to Ghana’s economic growth,” Yusupha B. Crookes, World Bank Country Director for Ghana stated.

The project would focus on priority areas of the government to promote transparent and accountable fiscal governance in Ghana.

The key beneficiaries of the project include the Legislature and Ministry of Finance, as well as Metropolitan, Municipal and District Assemblies (MMDAs).

Ismaila B. Ceesay, World Bank Task Team Leader for the Project said, “Ghana has invested in programmes aimed at strengthening Public Financial Management in government, but significant institutional, policy and system weaknesses continue to manifest themselves limiting the impact of these reforms.”

The project would also help facilitate the reversal of the current trend of fiscal imbalances impacting the country’s economy and improve the delivery of basic services to the many poor families in Ghana.