Ghana runs to World Bank, IMF for buffer against coronavirus outbreak

Ghana has triggered all its contacts with the World Bank and the International Monetary Fund, with the hope of finding an external support to address the brunt of the coronavirus (COVID-19) on the Ghanaian economy.

“We are currently in discussion with the World Bank to tap into a US$12billion World Bank Group fast track COVID-19 facility to help close the financing gap. In addition, we are discussing with the International Monetary Fund to access part of a US$10billion facility, made available by the IMF to address coronavirus through the Rapid Credit Facility. We are also discussing with other multilateral and bilateral partners on potential assistance to close the financing gap”, the Finance Minister, Ken Ofori-Atta told a half-packed Parliament at a sitting on Wednesday, March 17, 2020.

Events of the coronavirus are still unfolding, preliminary analysis conducted by the Ministry of Finance, according to Mr. Ofori-Atta, has revealed that the virus will impact negatively on petroleum receipts due to the collapse of international crude oil prices, custom receipts, other receipts, expenditures and financing conditions on the fiscal front.

The country’s tourism sector, travel and conferences, Foreign Direct Investment (FDI), international trade, food and nutrition, and poverty reduction strategies are all negatively being affected by the impact of the coronavirus.

According to the Finance Minister, it was based on the analysis they’ve conducted that have informed the country’s decision to seek funding support from the two Bretton Woods Institutions as part of measures put in place to close a possible financing gap in the 2020 Budget.

That notwithstanding, he told the House that the measures may include withdrawal from the Stabilization Fund occasioned by anticipated shortfalls in the Annual Budget Funding Amount (ABFA).

One of Mr. Ofori-Atta’s deputies, Charles Adu Boahen, who was present in the House, gave a little update about the country’s engagement with the World Bank and the IMF.

According to him, the emergency relief fund put in place by the World Bank, each member country is entitled to 0.1% of its GDP to deal with the coronavirus disease.

To that effect, he said “Ghana has been allocated an amount of US$35million”, noting that the West African nation has put in an application to access the fund and is waiting for the response.

“So, far the World Bank has not set out any conditionality that will be required for the country to meet before accessing the interest-free loan facility. If they set out any conditionality for us to meet, the Ministry will come to Parliament and brief members accordingly”, he noted.

Ghana is expected to start repaying the interest-free loan facility in five years’ time once the amount is accessed, kasapafmonline.com has learnt.