Wednesday, August 10, 2011

Ghana Reaches World Bank Middle Income Status

Interesting...

On July 1, 2011 Ghana moved from low-income to lower middle-income status, according to World Bank country classifications. 

Projections from the Bank’s Global Economic Prospects position Ghana as the fastest growing economy in Sub-Saharan Africa for 2011, with a forecast GDP growth of 13.4 percent. Authorities are now anxious to see that the oil windfall has a positive, lasting impact on the lives of all Ghanaians. In particular, Ghana hopes to steer clear of the so-called “Dutch disease”—the unique paradox where resource-rich countries grow too heavily dependent on oil at the expense of other productive sectors.

On another note, Ghana’s largest and most important creditor for the past three decades has been the International Development Association (IDA), the soft loan window of the World Bank. That will soon come to an end given the country's middle income status. The combination of Ghana’s rapid economic growth and the recent GDP rebasing exercise means that Ghana suddenly finds itself above the income limit for IDA eligibility. Formal graduation is imminent and comes with significant implications for access to concessional finance, debt, and relations with other creditors. 

See related article here.

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