Ghana, along with other developing countries is expected to receive interest-free or zero-interest loans from the World Bank through its International Development Association (IDA).
The provision of zero-interest loans according to the World Bank will also come along with some concessional loans and grants as sources of financing to Ghana and other developing countries.
The provision of concessional and zero-interest loans according to President of the World Bank, David Malpass, forms part of the Bank’s post covid-19 strategy to revive devastated economies.
“The world has seen a major reduction in interest rates, into zero or even negative for some borrowers. However, for some borrowers in Africa, the interest rates are still high. So, one of the questions to creditors and to potential lenders is, are there ways to have much lower interest rates for debt as it is rolled over in Africa”, the World Bank boss quizzed.
“And it is the high priority of the World Bank to try to find light at the end of the tunnel so that the people of Africa are not constantly under the burden of unsustainable debt [sic],” he added.
Commenting on some policies to be implemented by the World Bank to help deal with the rising debt stock of African countries, Mr. Malpass averred “One issue is to try to hold down the non-concessional debt that is being taken on, and non-concessional means higher interest rate debt, because that burdens the future generations.”
Adding the World Bank and the International Monetary Fund are working closely to ensure that as they want countries to have sustainable debt burdens rather than unsustainable debt burdens.