Coronavirus: Govt will access IMF’s $1bn from April 18 – Ken Ofori-Atta

Minister for Finance Ken Ofori-Atta says the IMF’s disbursement of $1 billion which is to be drawn under the Rapid Credit Facility (RCF) will be accessed from April 18, 2020.

According to Ken Ofori-Atta, all paper works will be concluded this week and hopefully by the weekend government will begin to access the funds.

The Executive Board of the International Monetary Fund (IMF) on Monday approved the disbursement of $1 billion to be drawn under the Rapid Credit Facility (RCF).

Following the IMF Executive Board’s discussion of Ghana, Tao 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.

“Additional support from other development partners will be required and critical to close the remaining external financing gap and ease budget constraints.”

Reacting to the disbursement in a radio interview, Ken Ofori-Atta said the money from the IMF is an important intervention to help Ghana’s Covid-19 fight.

“I think it was an important intervention and I think the timeliness of the IMF’s response and the proactiveness in which they have work with us is quite outstanding because by realising the impact of the coronavirus on our economy and I did go to parliament to suggest that we are going to lose over a billion dollars in revenue due to oil and excesses both import taxes and domestic taxes which is fast diminishing, we are going to have a gap, over 1.3 billion dollars equivalent will be needed to ensure that we counter the slow and tightened financial conditions and pressure on our exchange rate…”

He further explained that “the beauty of this is that the rapid credit facility we went for is a zero percent facility, it’s 10years and Five and half moratorium.”

“We do all the paper works and possibly by the weekend we should have the Bank of Ghana issued in these funds,” he added.