Friday, February 27, 2015

Confirmed: Ghana gets US$940m in IMF bailout.






Ghana would receive about US$940 million from the International Monetary Fund (IMF), to help the country turn the ailing economy around.

According to a statement from the IMF, Ghana could be supported with a total of “SDR 664 million (around US$940 million), or 180 percent of Ghana’s IMF quota” and “consideration by the Executive Board is tentatively scheduled in early April 2015.”

This was revealed at a press conference on Tuesday but the funds will be released to Ghana after final approval by the IMF board.

The IMF team, led by Joel Toujas-Bernate clarified that the $940 million is for balance of payment supports and not direct budgetary injections.

Mr Toujas-Barnate is quoted in the statement as saying “the IMF mission and the Ghanaian authorities reached staff level agreement on an economic program aimed at overcoming the country’s economic challenges, supporting stronger economic growth and lower inflation.”

Three pillars of the IMF deal

1. Restrain and prioritise public sector spending

2. Increase tax collection

3. Strengthening the effectiveness of the Bank of Ghana’s monetary policy role

IMF’s take on Ghana’s economic problem

According to the IMF, Ghana experienced three difficult years characterized by declining economic growth, increasing inflation rates, rising debt levels and financial vulnerabilities adding that in 2014 economic growth reached its lowest level in many years, with non-oil GDP growing at 4.1%, in the context of high interest rates, a fast depreciating currency, low aggregate demand and a deepening energy crisis.

By: Godwin Allotey Akweiteh and Raymond Acquah/citifmonline.com/Ghana