IMF Bailout: Ghana likely to get $2bn in assistance – Information Minister
Government, is said to likely receive about $2 billion in assistance from the International Monetary Fund (IMF) following the country’s request for a bailout from the Bretton Wood institution.
This is after deliberations on a specific support package have been agreed on by both parties.
Making the disclosure during an interview, Information Minister, Kojo Oppong Nkrumah, noted that considering Ghana’s quota and macroeconomic data, it is possible for the country to get the said amount to help shore up its reserves.
Adding that, with the $2 billion, government will be able to meet its liquidity and debt service obligations and also boost domestic revenue measures.
“Already, you recall that the Finance Minister initially indicated that there were arrangements to get about $2 billion, out of which there is $1 billion available. Parliament has to approve for us to receive so that the cedi does not depreciate further.
“We have a shore up of our reserves to be able to meet the liquidity and debt servicing obligations even as our domestic measures will get better. You have the window to start talking to the Fund.
“Today [Sunday, July 2], I saw a document that said looking at Ghana’s quota and our macroeconomic data, we could get anything, maybe around $2 billion to help shore up what we are looking for,” he stated.
The lawmaker acknowledged that Ghana’s current challenges are multifaceted, hence said, “we need to rally round and draw from various sources – capital market, the Fund, domestic resource mobilisation.”
“Even when you borrow, you are going to service it with domestic resource mobilisation so the earlier we confront it, the better as well as the other challenges.”
Meanwhile, a former Finance Minister, Seth Terkper, has asked government to make public the specific support programme it is seeking from the Fund.
IMF team set to arrive in Ghana on Wednesday July 6
A team from the International Monetary Fund will arrive in Ghana on Wednesday, July 6, 2022, to commence negotiations with the Government of Ghana on the modalities for a package to support Ghana’s economy.
Ghana’s decision to opt for an IMF programme has been greeted with mixed reactions, with concern about what it may mean for public sector jobs and social programmes.
However, most economists have welcomed the measure as a necessary pill.
African nations such as Egypt, Tunisia, Kenya, Côte d’Ivoire, Rwanda, Ethiopia, Senegal, Uganda, Seychelles, Mali, Cameroon, Gabon, Equatorial Guinea and Mozambique are among countries on the continent which are already on an IMF programme.
On July 1, 2022, President Akufo-Addo authorised the Minister for Finance, Ken Ofori-Atta, to commence formal engagements with the International Monetary Fund (IMF).
A statement signed by the Information Minister, Kojo Oppong Nkrumah, said the president’s directive to the Finance Minister followed a telephone conservation between President Akufo-Addo and the IMF managing director, Kristalina Georgieva, conveying Ghana’s decision to engage with the Fund.
“The engagement with the IMF will seek to provide balance-of-payments support as part of a broader effort to quicken Ghana’s build-back in the face of challenges induced by the COVID-19 pandemic and, recently, the Russia-Ukraine crises,” the statement read.
IMF/Ghana engagement
In response, the resident representative of the IMF in Ghana, Albert Touna-Mama, confirmed that the Government of Ghana had indeed approached the Fund, and said that the IMF is ready to support Ghana.
“We can confirm that the authorities have been in touch to request [the] Fund’s support to Ghana’s own economic programme,” he wrote on Friday, in a tweet that included the Information Minister’s statement.
“The IMF stands ready to assist Ghana to restore macroeconomics stability; safeguard debt sustainability; promote inclusive and sustainable growth; and face the impact of the war in Ukraine and the lingering pandemic.
“We are looking forward to meeting with the authorities in the coming weeks to start the initial discussions,” the tweet said.
