The International Monetary Fund, IMF, has confirmed receipt of Ghana’s request to the Fund seeking financial assistance to help the country address the economic impact of the COVID-19 pandemic.
Ghana has recorded 53 cases with two deaths, and the numbers are expected to rise. Schools have shut down, with public gatherings suspended for four weeks, whereas some public services have also been halted.
Revenue in the Aviation sector has already dropped due to restrictions on in-coming flights, as the country’s bothers have been closed for two weeks. Businesses have started complaining about their losses as general economic activities have slowed down.
Finance Minister, Ken Ofori-Atta, last week told Parliamentarians that government will tap into the Rapid Credit Facility set up by the IMF and the World Bank as part of measures to bridge the expected shortfall in revenue for this year.
A release on the IMF website, cited the Director of the African Department at the IMF, Abebe Selassie, as indicating that the Fund is working hard to evaluate the request by Ghana and bring it for the Executive Board to consider as soon as possible.
“Last week, the IMF received Ghana’s request for a disbursement under the Rapid Credit Facility to help the country address the economic impact of the COVID-19 pandemic. We are working hard to evaluate the authorities’ request and bring it forward for Executive Board consideration as soon as possible,” the statement added.
So far, President Nana Akufo-Addo has directed the Minister for Finance, Ken Ofori-Atta, to make available the cedi equivalent of $100 million to enhance Ghana’s Coronavirus preparedness and response plan.
Before this directive, the total budget for preparedness with regard to the novel coronavirus stood at GHS35 million.
Support from government was going towards the provision of Personal Protective Equipment (PPE), coordination activities and health declaration forms.
This amount, according to President Akufo-Addo, “is to fund the expansion of infrastructure, purchase of materials and equipment, and public education.”
There have however been calls for stimulus packages to cushion Ghanaians and businesses that may be affected by the measures put in place to curb the spread of the novel coronavirus, including a possible lockdown.
About the Rapid Credit Facility
The Rapid Credit Facility provides rapid concessional financial assistance with limited conditionality to low-income countries facing an urgent balance of payments need.
It was created under the Poverty Reduction and Growth Trust as part of a broader reform to make the Fund’s financial support more flexible and better tailored to the diverse needs of low-income countries, including in times of crisis.
The facility places emphasis on the country’s poverty reduction and growth objectives, according to the IMF.
Access to facility financing is determined on a case-by-case basis, taking into account the country’s balance of payments need, the strength of its macroeconomic policies, capacity to repay the Fund, the amount of outstanding Fund credit, and the member’s record of past use of Fund credit.
In addition, it also takes into account the size and likely persistence of the shock.
(by Ebenezer Afanyi Dadzie)