COVID-19: Ghana’s need for financial support - IMF confirms receipt of request
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COVID-19: Ghana’s need for financial support - IMF confirms receipt of request

- Ghana has placed a request for a Rapid Credit Facility (RCF) before the International Monetary Fund (IMF) to help deal with the coronavirus

- The IMF has acknowledged the request and is in the process of considering it at the Executive Board level

- President Akufo-Addo earlier revealed that Ghana intends to set aside $100 million to fight the coronavirus

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The International Monetary Fund (IMF) has acknowledged receipt of Ghana’s request for financial support to deal with the coronavirus.

On Tuesday, March 24, 2020, IMF’s African Department Director, Abebe Aemro, revealed that Ghana has requested for a Rapid Credit Facility (RCF) to help deal with the economic effects of the outbreak.

Abebe noted that the IMF is currently evaluating the request and would soon present it before the Executive Board for consideration.

READ ALSO: Ghana's cedis and 5 other currencies ranked as the best in Africa

The RCF gives immediate concessional financial assistance with limited conditionality to low-income countries that face an urgent balance of payment need.

Per a Business Insider report, the RCF is a facility created under the Poverty Reduction and Growth Trust (PRGT) and forms part of wider reforms to make funds available to countries that need support in times of crisis.

The exact amount Ghana has requested is yet to be revealed but the decision follows an announcement by President Akufo-Addo to the effect that Ghana would dedicate $100 million to the fight against the virus.

Following the decision, the finance minister, Ken Ofori-Atta, informed Parliament that the initial assessment of the situation proved the coronavirus would lead to a funding gap in the economy.

He then added that Ghana would fall on the IMF, the World Bank and the Stabilisation Fund to stem the spread of the coronavirus.

Meanwhile, an international rating agency, Fitch, has predicted that Ghana’s growth rate is likely to fall from 6.5% to 6.2%.

The 0.3% fall in the growth rate has been attributed to the effects of the coronavirus on the economy.

Fitch explained that it, therefore, expects the real Gross Domestic Product (GDP) to also expand by 6.2%.

Fitch’s analysed the impact of the coronavirus on sub-Saharan economies and concluded that Africa’s oil producers countries could record reduced growths and export earnings.

The reason for the decline, it has been revealed, is the sharp decline in global oil prices as a result of the Organisation of Petroleum Exporting Countries (OPEC) to agree on additional production cutbacks.

READ ALSO: Bank of Ghana's Monetary Policy Committee reduces policy rate to 14.5%

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Source: Yen

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