The World Bank has granted a freeze to Ghana on repayment of a $500-million dollar debt. The amount represents debt and interest repayment for the remaining months in 2020. This was disclosed by President Akuffo Addo during his address to the nation on April 19, 2020
According to the President, the move is part of a broader pan-African effort for debt relief due to the impact of the Covid-19 pandemic on the global economy, especially Africa.
President Akuffo-Addo said African Finance Ministers, led by Ghana’s Ken Ofori-Atta, and his South African Co-Chair, secureD a nine-month debt halt from the World Bank for all members of the International Development Association (IDA).
The freeze in debt repayment will start from May 1, 2020 to January 2021.
The total amount for the beneficiaries on the continent is $44 billion. “In the case of Ghana, this amounts to a freeze in principal and interest payments for the year, amounting to $500 million. “This will create greater fiscal space to help make the Ghanaian economy much more resilient,” the President said.
While commending his Finance Minister for his performance relative to the debt freeze, President Akufo-Addo also urged him to work towards achieving a comprehensive debt relief intervention for the continent.
Disbursement to SMEs to start in May
Meanwhile, the President has announced that the disbursement of the GH₵600 million stimulus package for micro, small and medium-scale businesses will start in May.
The stimulus package, which forms part of the Coronavirus Alleviation Programme (CAP) will serve the main purpose of supporting households and businesses, thIs according to the President.
Aside from this, President Akuffo-Addo also welcomed the GH₵3 billion credit and stimulus package, promised by the leadership of the Ghana Association of Bankers, with support from the Bank of Ghana, to revitalise Ghanaian industries. The package is expected to offer financial relief to especially the pharmaceutical companies.
$1bn Rapid Credit Facility to be used to close financial gap
Commenting on the $1 billion dollars Rapid Credit Facility secured from the International Monetary Fund recently, the President explained that the money will be used close the financial gap created by the COVID-19 pandemic.
Again, while touching on the utilization of the CAP, the President explained that Government has, so far, allocated a GHc1.2 billion, under the Coronavirus Alleviation Programme, to support households and businesses.
Out of this, GH₵280 million is being used to provide food for the vulnerable and free water for all Ghanaians in April, May and June.
A total of GH₵323 million is being used to motivate frontline health workers leading the fight against COVID-19, while a GH₵600 million assistance package is for micro, small and medium-scale businesses.
Additionally, the Government is absorbing the full electricity bills of one million active lifeline customers and granting 50 per cent subsidy to the other categories of power consumers at a total cost of GH₵1 billion.