World Bank approves $250 million International Development Association (IDA) credit for Ghana’s five-year Financial Stability Project

The World Bank has approved a $250 million International Development Association (IDA) credit for Ghana’s five-year Financial Stability Project.

This initiative aims to support Ghana’s Financial Sector Strengthening Strategy (FSSS) by improving financial stability through the recapitalization of viable banks and Specialized Deposit-taking Institutions (SDIs) impacted by Ghana’s Domestic Debt Exchange Program (DDEP).

In order to address the severe impact of the DDEP on financial institutions, Government established the Ghana Financial Sector Stability Fund (GFSF) to provide solvency support to banks, pension funds, insurance companies fund managers, and collective investment schemes.

The Ghana Financial Stability Project is expected to immediately benefit eligible undercapitalized yet viable banks and SDIs. It will also become accessible to other banks and SDIs that may need support in the future due to potential new losses, providing a safeguard against unexpected financial setbacks.

The initiative supports the World Bank’s Development Programme Financing series and the IMF-Extended Credit Facility, both of which promote reforms to enhance the macroeconomic environment and allow financial institutions to function successfully and produce internal capital.