The International Monetary Fund (IMF) has approved the released of $1 billion to Ghana to respond to coronavirus economic turbulence in the West African country. The $1 billion would be drawn under the Rapid Credit Facility.
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, IMF said.
“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,” said Mr. Tao Zhang, IMF Deputy Managing Director and Board Chair.
“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.”
Zhang said Ghana’s response to the coronavirus 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,” he added.