The Executive Board of the International Monetary Fund (IMF) on Monday, April 13, 2020, approved the disbursement of SDR 738 million (about US$1 billion) to be drawn under the Rapid Credit Facility (RCF) by the government of Ghana.
It will help address the urgent fiscal and balance of payments needs that Ghana is facing, improve confidence, and catalyse support from other development partners.
âThe COVID-19 pandemic is already impacting Ghana severelyâ, the IMF said in a statement, explaining: âGrowth is slowing down, financial conditions have tightened, and the exchange rate is under pressureâ.
âThis 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 firmsâ.
The IMF said it continues to monitor Ghanaâs situation closely and stands ready to provide policy advice and further support as needed.
Following the Executive Boardâs discussion of Ghana, Mrs Zhang, Deputy Managing Director and Chair, said: âThe 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 Fundâs emergency financial assistance under the Rapid Credit Facility will help address the countryâs urgent financing needs, improve confidence, and catalyse support from other international partners.
âThe authoritiesâ 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.
âThe 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.
âAdditional support from other development partners will be required and critical to close the remaining external financing gap and ease budget constraints.â
Ghana has, so far, recorded eight deaths out of the five hundred and sixty-six confirmed cases with four full recoveries.
source: classfmonline.com
