The World Bank
May 28, 1999

Washington - The following document was released by World Bank On May 27,
1999: The World Bank today approved a US$180 million equivalent credit to
support the Government of the Republic of Ghana in strengthening the
foundation for sustained broad-based, private sector-led economic growth.

This credit will assist the government's medium-term strategy outlined in
"Ghana Vision 2020" which aims to turn Ghana into a middle-income country
by
the turn of the next decade. The Second Economic Reform Support Operation
Credit will build upon foundations laid in the first credit by
consolidating
recent gains in macroeconomic stability and by supporting the
implementation
of a deeper and more challenging phase of reforms in the cocoa, energy, and
banking sectors. The credit will also assist in reducing the government's
domestic financing requirements and help support a downward trend in
inflation and interest rates, resulting in a reduction of the country's
heavy domestic debt burden.

The creation of an enabling environment for private investment (domestic
and
foreign) is the main focal point of the government's strategy for
accelerated economic growth and poverty reduction. The government will
achieve this through:

Reforming the cocoa sector. Cocoa remains an important contributor to the
Ghanaian economy and the sector supports the livelihood of about 800,000
farm families. The reforms will boost exports and have a positive impact on
the incomes of farmers, which will impact the rural economy. Restructuring
the banking system which will improve the soundness of the financial system
and eliminate sources of quasi-fiscal deficits and inefficient allocation
of
financial resources. Reforming the energy sector to facilitate private
sector participation in power generation and distribution which will
enhance
private investments prospects.

Since 1983, the Government of Ghana has implemented a successful, gradual
adjustment strategy designed to stabilize and liberalize the economy, but
the adjustment process suffered a series of setbacks in the early 1990s.
This prompted the government in 1997 to take decisive steps to bring the
macroeconomic program back on track and to accelerate structural reforms.

The Second Economic Reform Support Operation Credit will be financed by a
US$180 million equivalent credit from the International Development
Association (IDA), the World Bank's lending arm for the poorest countries.
The IDA credit is on standard terms of 40 years maturity, including 10
years
grace.

Media Contacts: In Washington Sharon Cox (202) 473-2035 In Ghana Kofi
Marrah
(233-21) 229 681 Operational Contact: Rocio Castro (202) 473 4331. To
obtain
project documents please contact the World Bank's Infoshop at tel:
202-458-5454, fax: 202-522-1500, email: [log in to unmask]