The International Monetary (IMF) Executive Board has approved one billion dollars for the government of Ghana to address the fiscal and balance of payment needs of the country arising out of the COVID-19 pandemic.
The IMF, in a press release issued on Monday and copied to the Ghanaian Times, said the facility that would be drawn under the Rapid Credit Facility, was to help raise confidence and shore up the Ghanaian economy.
“The Executive Board of the IMF today approved the disbursement of SDR 738 million (about US$1 billion) to be drawn under the RCF. The disbursement will help address the urgent fiscal and balance of payments needs that Ghana is facing, improve confidence, and catalyse support from other development partners,” the statement said.
It said COVID-19 pandemic was already impacting Ghana severely and slowing the country’s growth and putting pressure on the Ghanaian Cedi.
“The COVID-19 pandemic is already impacting Ghana severely. Growth is slowing down, financial conditions have tightened, and the exchange rate is under pressure. This has resulted in large government and external financing needs. The authorities have timely and proactively responded to contain the spread of the COVID-19 pandemic in Ghana and support affected households and firms,” said the statement.
It indicated that the IMF continued to monitor Ghana’s situation closely, and was ready to provide policy advice and further support as needed.
The statement said Ghanaian authorities had timely and proactively responded to contain the spread of COVID-19 pandemic and offered support to affected households and firms.
“The authorities’ response has been timely, targeted, and proactive, focused on increasing health and social spending to support affected households and firms. The Central Bank has recently taken steps to ensure adequate liquidity, preserve financial stability, and mitigate the economic impact of the pandemic, while allowing for exchange rate flexibility to preserve external buffers,” the statement said.
It added that “The uncertain dynamics of the pandemic creates significant risks to the macroeconomic outlook. Ghana continues to be classified at high risk of debt distress. The authorities remain committed to policies consistent with strong growth, rapid poverty reduction, and macroeconomic stability over the medium-term.”
The statement said “additional support from other development partners will be required and critical to close the remaining external financing gap and ease budget constraints”.
Ghana has so far recorded 566 confirmed cases of corona virus disease which has no cure, with 17 people fully recovered, and eight deaths.
Attempts to get the Ministry of Finance to confirm the IMF financial support to Ghana proved futile.
BY KINGSLEY ASARE