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9. Conclusions

The analysis in this Evaluation Study leads to five main conclusions.

First, the graduation has been followed by a change in the composition of development finance, including decreasing bilateral disbursements suggesting a ‘herding’ effect as described in the literature. A negative correlation between commitments and disbursements was also found. This result may require further analysis, but it could indicate that bilateral donors make significant adjustments also during the process when aid is phased out.

Second, while graduation may have contributed to developments in Ghana, a key challenge is public financial management, which has led to persistent deficits and underfunding of the social sectors and agriculture. This is acknowledged by the government and a set of public financial managements regulations have recently been submitted to Parliament. In the most recent debt sustainability analysis, Ghana was again characterized as a country at high risk of debt distress. The government seems to emphasize the implementation of the debt management strategy and a slight reduction in the debt-to-GDP ratio was achieved in 2017, but interest payments still constitute a very high share of the budget.

Third, in spite of efforts to improve domestic resource mobilization, Ghana is still lagging behind comparable countries, which is critical in view of the government’s intention to finance a significant share of the development needs, including the SDGs, using domestic finance. The recently published provisional figures for 2017 are in this respect disappointing, and the ambition of gradually increasing the tax-to-GDP ratio to 24 percent in the medium term may not be realistic if additional policy measures are not implemented.

Fourth, a broad range of strategies and policies have been developed, but many of them still need to be operationalized and implemented. This also applies to the SDGs, where Ghana has not developed a plan that can guide the financing and implementation of the SDGs. The present government has recently stated its ambition to develop such a plan, but although it is early in the process, there is major concern whether Ghana will be able to finance the fulfilment of the SDGs and increase the support to sectors critical for the SDGs.

Fifth, the experience of Ghana documents the complex challenges countries face when they transition through different development phases, but also that transition processes will be country specific and comparative studies would be useful in order to get a better understanding of transition processes. The analysis also indicates that the international community could play an important role in assisting countries going through these processes as suggested in several recent analyses (see e.g. UN, 2018).


This page forms part of the publication "Evaluation Study – Graduation and Development Finance in the SDG Era – A Case Study of Ghana, May 2018" as chapter 9 of 9.
Version no. 1.0, 2018-06-27
Publication may be found at the address http://www.netpublikationer.dk/um/evaluation_case_study_ghana_may_2018/index.html