International Monetary Fund (IMF) as part of the measure to help Ghana fight coronavirus has approved $1 billion which is captured under the Rapid Credit Facility( RCF).
The Executive Board of IMF deemed it fit to help Ghana as conspicuously the COVID-19 has impacted negatively on the economy. The exchange rate for cedi is already weakening. As a measure to contain COVID-19 spread and management, there was a need for lockdown in not only in Ghana but the rest of the world.
According to Finance Minister Ken Ofori Atta on 30 March 2020 said in Parliament that Ghana needs $2 billion to stay strong financially to deal with the epidemic. The situation has already started to create a deficit in the country’s balance of payment. This money is scheduled to be disbursed to Ghana by tomorrow, 16 April 2020. This loan facility is timely.
“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.
According to the Minister of Finance, “the anticipated decline in import volumes and values, as well as the slowdown in economic activities.”
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.