The fund on April 13 approved a $1 billion credit facility that it said would help “address the country’s urgent financing needs, improve confidence, and catalyze support from other international partners.”
The loan is to be drawn from the IMF’s Rapid Credit Facility (RCF), a product of the Bretton Woods institution that gives concessionary financial assistance with limited conditionalities to low-income countries (LICs).
A statement issued on April 13 said although the govt was proactive in addressing the difficulty, “additional support from other development partners is going to be required and important to shut the remaining external financing gap and ease budget constraints.”
It said the pandemic had already led to a slowdown in growth, tighter financial conditions and increased pressure on the rate of exchange.
It added that the IMF would still monitor Ghana’s situation closely and was also able to provide policy advice and further support as required.
This is often the second time in five years that the country has sought financial assistance from the IMF to assist smoothen out fiscal roughages and bolster growth within the economy.
Read Also: COVID-19: GES Begins Fumigation & Disinfection Exercise In All Public And Private SHS
In 2015, the country entered into a $918 million Extended Credit Facility (ECF) program with the IMF to assist correct the fiscal slippages at the time that were resulting mainly from deterioration within the external sector.
The three-year program was later extended by a year and led to April last year.
Below is that the full statement
IMF Executive Board approves a US$1 billion disbursement to Ghana to deal with the COVID-19 Pandemic
FOR IMMEDIATE RELEASE
The Executive Board of the International fund (IMF) today approved the disbursement of SDR 738 million (about US$1 billion) to be drawn under the Rapid Credit Facility (RCF). The disbursement will help address the urgent fiscal and balance of payments needs that Ghana is facing, improve confidence, and catalyze support from other development partners.
The COVID-19 pandemic is already impacting Ghana severely. Growth is slowing down, financial conditions have tightened, and therefore the rate of exchange is struggling . This has resulted in large government and external financing needs. The authorities have timely and proactively skilled contain the spread of the COVID-19 pandemic in Ghana and support affected households and firms.
The IMF continues to watch Ghana’s situation closely and stands able to provide policy advice and further support as required .
Following the chief Board’s discussion of Ghana, Mr. Zhang, Deputy director and Chair, issued the subsequent statement:
“The COVID-19 pandemic is impacting Ghana severely. Growth is projected to hamper , financial conditions have tightened, and therefore the rate of exchange is struggling . The deficit is projected to widen this year given expected lower government revenues and better spending needs associated with the pandemic. The Fund’s emergency financial assistance under the Rapid Credit Facility will help address the country’s urgent financing needs, improve confidence, and catalyze support from other international partners. “The authorities’ response has been timely, targeted, and proactive, focused on increasing health and social spending to support affected households and firms. The financial institution has recently taken steps to make sure adequate liquidity, preserve financial stability, and mitigate the economic impact of the pandemic, while allowing rate of exchange flexibility to preserve external buffers.
“The uncertain dynamics of the pandemic creates significant risks to the macroeconomic outlook. Ghana continues to be classified at high risk of debt distress. he authorities remain committed to policies according to strong growth, rapid poverty reduction, and macroeconomic stability over the medium-term.
“Additional support from other development partners are going to be required and important to shut the remaining external financing gap and ease budget constraints.”
0 Comments