The World Bank has acknowledged allegations involving the operations of the Development Bank Ghana (DBG), a recipient of funding under the Ghana Development Finance Project supported by the International Development Association (IDA). In a brief statement, the World Bank stated, “We take all fiduciary issues very seriously and are engaging key partners to obtain full clarifications.”
These allegations were recently brought to light by Bright Simons, Vice President of Imani Africa, who claimed that funds allocated to DBG had been mismanaged. Simons raised concerns about the bank’s capitalization, alleging that over GH¢400 million had been lost due to improper contracting.
DBG Denies Allegations of Mismanagement
In response, DBG strongly denied accusations of fund mismanagement, dismissing media reports as containing “significant inaccuracies and falsehoods.” The bank emphasized its commitment to transparency and its role in Ghana’s economic transformation.
DBG clarified that it was initially capitalized with GH¢1.135 billion (around $200 million) in 2021 by the Ghanaian government, with additional funding from the African Development Bank. The institution refuted claims of misappropriating over GH¢400 million and highlighted its adherence to stringent procurement policies. A statement from DBG on November 13 noted, “Our procurement processes remain stringent, rigorous, and evolving in line with best global practices.”
The bank also disputed allegations of GH¢700 million in losses, instead reporting consistent annual profits since its inception, including GH¢80.1 million in 2023. Furthermore, DBG rejected claims of misusing funds from the World Bank and European Investment Bank, stating that these resources are strictly monitored and used exclusively for on-lending through financial institutions.
What is the IDA?
The International Development Association (IDA) is the World Bank’s branch dedicated to assisting low-income countries. It provides grants and low-interest loans to help nations invest in development projects, improve living standards, and build safer, more prosperous communities.
World Bank Approves $250 Million for Ghana
On June 18, 2024, the World Bank approved $250 million in credit through the IDA and an additional $10 million grant from the Energy Sector Management Assistance Programme. These funds aim to support Ghana’s four-year Energy Sector Recovery Programme for Results (PforR). The program seeks to enhance the financial sustainability of electricity distribution and improve access to clean cooking solutions.
The PforR will finance utilities’ capital expenditure programs and complement policy reforms in the energy sector under the World Bank’s Development Policy Financing series and the IMF Extended Credit Facility Programme. Additionally, the program’s clean cooking component will expand access to Liquefied Petroleum Gas (LPG) for households, schools, and businesses by subsidizing stoves and accessories.
The initiative is expected to deliver various benefits, including improved energy access, affordability, equity, and health protection against air pollution. Robert Taliercio, World Bank Country Director for Ghana, Liberia, and Sierra Leone, stated, “Through this important results-based financing, the World Bank is committed to supporting the recovery of Ghana’s energy sector and its financial sustainability. The operation aims to strengthen revenue collection and improve the quality of energy supply through investments in prepaid metering and in the commercial and meter management systems of distribution utilities.”
Ghana’s Minister for Finance, Dr. Mohammed Amin Adam, expressed gratitude to the World Bank, emphasizing the importance of achieving Sustainable Development Goal 7 (Affordable and Clean Energy). He remarked, “Our quest to achieve financial viability in electricity distribution and increase access to clean cooking solutions is essential for building sustainable energy systems that support economic development, improve public health, and protect the environment.”
The Energy Sector Management Assistance Programme also provides technical assistance and advisory services to help countries develop institutional capacity and implement sustainable energy solutions.
Source: TheDotNews