The Bank said it was important for the government to broaden its tax base, including the introduction of carbon taxes and reduce expenditure.
The Bank also asked the government to have a strategic approach to building a long-term buffer through increased public and private resources and revenue mobilisation, and leverage on opportunities in global decarbonisation.
The call was made at the launch of the 2022 Ghana Country Climate and Development Report, which is aimed at helping countries to prioritise actions that foster a resilient and low carbon development pathway.
The report by the World Bank builds on data evidence and research to suggest actions to support the transition to low-carbon growth through a combination of policies and public and private investments.
The report found that at least one million Ghanaians could fall into poverty due to climate shocks if urgent climate actions were not taken, with the income of poor households reducing up to 40 per cent by 2050.
Speaking at the launch of the report, Mr Pierre Laporte, the World Bank Country Director to Ghana, Liberia, and Sierra Leone, noted that in the context of high debt and tight fiscal constraints, Ghana must carefully prioritise investments to achieve the more than $26 billion in economic benefits by 2040.
“The country will need to take action to restore macroeconomic stability and improve business enabling environment to mobilise funds from various sources, including private and development finance,” he said.
Mr Laporte also said: “The country can take a more resilient development pathway, avoiding costly lock-ins, leapfrogging to cutting-edge technologies, and starting to mobilise climate finance.”
He, however, said that for Ghana to achieve that, it would require “a high-level commitment, a clear financial strategy, strong institutions and making sure that nobody is left behind.”
On the part of the Bank, he said it was supporting Ghana in disaster risk management, urban development, landscape management, forestry, water supply, social protection and food systems to address climate change and build resilience.
“Our current portfolio stands at $3.3 billion…as part of the Climate Change Action Plan 2021-2025. We aim to step up further WBG commitments to the climate change agenda and align all World Bank projects to the Paris Agreement,” he said.
Mr Kyle Kelhofer, the International Finance Corporation’s (IFC) Senior Country Manager for Benin, Ghana, Guinea, and Togo, said the report showed that the private sector could lead Ghana’s green growth.
He particularly noted that green building, renewable energy, climate-smart agriculture and energy efficiency improvements, presented many opportunities to Ghana.
Mr Kelhofer said IFC was supporting Ghana by increasing investment and advisory services to such ventures.
The report recommended among others that Ghana fosters integrated landscape management, promote climate-smart agriculture, and support the adaptation of coastal communities.
It also called for the promotion of a transition to clean energy by scaling up renewable energy sources and strengthening regional energy markets, as it improves public transportation as well as update vehicle standards.