World Bank Group Support to Ghana, Fiscal Years 2013–23 (Approach Paper)

Country Program Evaluation of World Bank Group Support to Ghana (FY13-23)

Purpose, Objectives, and Audience

This evaluation aims to assess the performance of World Bank Group support to Ghana from fiscal years 2013 to 2023. The evaluation period covers two Bank Group-supported country strategies: the FY13–16 Country Partnership Strategy (CPS), extended to FY18, and the current FY22–26 Country Partnership Framework (CPF). Key aspects include:

• Relevance, Coherence, and Efficacy: Assessing how the Bank Group's support has helped Ghana address its main development challenges.
• Adaptation: Evaluating how the Bank Group adjusted its engagement in response to changing conditions, priorities, and lessons learned.

The evaluation will also focus on three important thematic challenges:

1. Fiscal Sustainability
2. Energy Sector
3. Education and Skills Development

The findings aim to inform future Bank Group engagement in Ghana and may be relevant to other countries facing similar challenges. The target audience includes the Bank Group’s Board of Executive Directors, Bank Group staff and management, the Ghana government, and a broader set of stakeholders such as development partners, civil society, the private sector, research organizations, and citizens.

Background and Country Context

Economic Progress and Challenges

• Economic Growth: Ghana experienced significant economic growth, with GDP per capita increasing by an average of 2.3% per year between 2013 and 2022. Economic growth was heavily dependent on commodity prices, particularly cocoa and gold, and oil and gas production starting in 2011.
• Peak Growth: In 2011, Ghana's GDP growth peaked at 11.3%, making it the fastest-growing economy in Sub-Saharan Africa and helping it transition from a low-income to a middle-income country.
• Macroeconomic Crisis: By the start of the CPF in 2022, Ghana faced a full-blown macroeconomic crisis due to accelerating fiscal and debt vulnerabilities and external shocks, including the COVID-19 pandemic. In December 2022, inflation reached 54% year on year, and a debt default was declared.

Poverty and Social Progress

• Poverty Reduction: Ghana achieved the Millennium Development Goal of halving poverty from 64.2% in 1991 to 25.7% in 2012, but progress has stagnated. Poverty is projected to increase to 33.4% by 2025 due to the impact of the pandemic and inflation.
• Demographics: Ghana's population of about 31 million is highly urbanized and young, with over 50% living in urban areas and approximately 73% under 35 years of age. There are significant disparities between the northern and southern regions, with the poorest regions also being the most vulnerable to climate change.

Economic Sectors

• Extractive Sector: The extractive sector was expected to drive growth, with new natural gas fields and peak petroleum production. The oil and gas sector was expected to double its contribution to GDP in a decade.
• Debt: Despite initial debt relief, Ghana’s debt stock quickly rose again. From 59.7% of GDP in 2001, it fell to 15.5% in 2006 but then increased to 33.8% by 2012. Bond issuances have continued to grow, representing 21% of total public debt by 2022.

Challenges

• Persistent Challenges: Low agricultural productivity, limited social protection, and lack of access to finance persist. Macroeconomic and fiscal stability remains the most critical constraint.
• Key Challenges: The evaluation focuses on education and skills, agricultural productivity, macroeconomic stabilization, connectivity and transportation, access to energy, natural resource management, access to finance, and access to sanitation and water.

World Bank Group in Ghana

• Strategic Focus: The evaluation will assess the relevance of the Bank Group's strategic and operational focus on Ghana's critical development challenges. It will review how the Bank Group's strategies and activities responded to evolving country circumstances, shocks, and lessons learned.
• Continuity: Broad continuity in the Bank Group's strategic objectives over the evaluation period. The CPS (FY13–16) and CPF (FY22–26) guided support, aligning with the government’s development strategies.

The evaluation aims to provide insights into the effectiveness of the Bank Group's support in addressing Ghana's development challenges, with a particular focus on fiscal sustainability, the energy sector, and education and skills development.