The International Monetary Fund said its Executive Board has approved the disbursement of two billion dollars to Ghana to be drawn under the Rapid Credit Facility (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.
A statement from the IMF said the COVID-19 pandemic was already impacting Ghana severely.
‘’Growth is slowing down, financial conditions have tightened, and the exchange rate is under pressure, resulting in large government and external financing needs,’’ the statement said.
“The authorities have timely and proactively responded to contain the spread of the COVID-19 pandemic in Ghana and support affected households and firms,” it said.
The IMF continues to monitor Ghana’s situation closely and stood ready to provide policy advice and further support as needed, it added.
Commenting on the approval, Mr Zhang, the Deputy Managing Director of the IMF, said Ghana’s budget deficit was projected to widen this year given expected lower government revenues and higher spending needs related to the pandemic.
The authorities’ response had 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,” Mr Zhang was quoted as saying.
The uncertain dynamics of the pandemic created significant risks to the macroeconomic outlook while Ghana continued to be classified at high risk of debt distress, the statement said.
The authorities remain committed to policies consistent with strong growth, rapid poverty reduction, and macroeconomic stability over the medium-term, it said.
“Additional support from other development partners will be required and critical to close the remaining external financing gap and ease budget constraints.”
