Ghana - Second Economic Rehabilitation and Support Loan (ERSO II)

The Second Economic Rehabilitation and Support Loan (ERSO II) is designed to consolidate gains in restoring macroeconomic stability, thereby creating the basis for sustained, broad-based, private sector-led economic growth. The loan’s proceeds were to help cover Ghana’s external financing requirements in the context of a vulnerable external position and low level of reserves. In addition, by providing counterpart funds for the budget, the loan should help reduce the government’s net domestic financing and domestic debt burden by limiting increases in the stock of debt, thereby facilitating a decline in real interest rates. The program in which this intervention falls aims to: (i) restoring macroeconomic stability, (ii) improving the functioning of the public sector (iii) promoting a decentralization policy in favour of the district level; (iv) promoting private sector development through a vast program of divestiture and the removal of structural impediments and (v) reducing poverty.