• On April 13, 2020, the IMF Executive Board approved the disbursement of US$1 billion to be drawn under the Rapid Credit Facility.
• The COVID-19 pandemic is already impacting Ghana severely. Growth is slowing down, financial conditions have tightened, and the exchange rate is under pressure.
• The authorities have timely and proactively responded to contain the spread of the COVID-19 pandemic in Ghana and support affected households and firms.
The Executive Board of the International Monetary Fund (IMF) yesterday approved the disbursement of SDR 738 million (about US$1 billion) to be drawn under the Rapid Credit Facility (RCF).
The disbursement is to help address the urgent fiscal and balance of payments needs that the country is facing, improve confidence, and catalyze support from other development partners.
The IMF said "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.
The IMF also added, it continues to monitor Ghana’s situation closely and stands ready to provide policy advice and further support if needed.
Following the Executive Board’s discussion of Ghana, Mr. Zhang, Deputy Managing Director and Chair, issued the following statement:
“The COVID-19 pandemic is impacting Ghana severely. Growth is projected to slow down, financial conditions have tightened, and the exchange rate is under pressure. The budget deficit is projected to widen this year given expected lower government revenues and higher spending needs related to 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 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 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.
“Additional support from other development partners will be required and critical to close the remaining external financing gap and ease budget constraints.”
On March 24, 2020, Ghana requested a rapid credit facility disbursement to help fight the coronavirus pandemic.
IMF’s African Department director Abebe Aemro Selassie in a statement said “Ghana has requested for a disbursement under the Rapid Credit Facility to help the country address the economic impact of the COVID-19 pandemic.
According to Abebe Aemro Selassie the IMF is working hard to evaluate the authorities’ request and bring it forward for Executive Board consideration as soon as possible.”
Credit to Source: IMF
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