The International Monetary Fund, (IMF) has confirmed receipt of Ghana’s request for financial assistance to help it address the economic impact of the COVID-19 pandemic.
Last week, Finance Minister, Ken Ofori-Atta, told Parliament 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.
This was in line with President Akuffo-Addo’s directive to Finance Minister to make available the cedi equivalent of $100 million to enhance Ghana’s Coronavirus preparedness and response plan.
The money is to fund the expansion of infrastructure, provision of Personal Protective Equipment (PPE), coordination activities and health declaration forms and public education.
Before this directive, the total budget for preparedness with regard to the novel coronavirus stood at GHS35 million.
A press release published on the IMF website, indicated that the Director of the African Department at the IMF, Abebe Selassie, has received the request and that the Fund is working hard to evaluate and forward 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 read.
Impact of covid-19 on Ghana’s revenues
Ghana has recorded 53 cases with two deaths as at Tuesday, March 24, 2020.
However, these numbers are expected to rise and already Schools have been shut down as well as a temporal ban placed on public gatherings and closure of the country’s airports and borders.
The situation has affected revenue in every facet of the economy.
Revenue at the Aviation sector has 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.
The IMF’s Rapid Credit Facility
The IMF’s 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 reforms 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.