{"id":94682,"date":"2015-02-26T17:14:00","date_gmt":"2015-02-26T17:14:00","guid":{"rendered":"http:\/\/4cd.e16.myftpupload.com\/?p=94682"},"modified":"2015-02-26T17:24:29","modified_gmt":"2015-02-26T17:24:29","slug":"confirmed-ghana-gets-us940m-in-imf-bailout-deal","status":"publish","type":"post","link":"https:\/\/citifmonline.com\/2015\/02\/confirmed-ghana-gets-us940m-in-imf-bailout-deal\/","title":{"rendered":"Confirmed: Ghana gets US$940m in IMF bailout deal"},"content":{"rendered":"

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

According to a statement from the IMF, Ghana could be supported with a total of \u00a0\u201cSDR 664 million (around US$940 million), or 180 percent of Ghana\u2019s IMF quota\u201d and\u00a0\u201cconsideration by the Executive Board is tentatively scheduled in early April 2015.\u201d<\/p>\n

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

The IMF team, led by Joel Toujas-Bernate\u00a0clarified that the $940 million is for balance of payment supports and not direct budgetary injections.<\/p>\n

Mr Toujas-Barnate is quoted in the statement\u00a0as saying \u201cthe IMF mission and the Ghanaian authorities reached staff level agreement on an economic program aimed at overcoming the country\u2019s economic challenges, supporting stronger economic growth and lower inflation.\u201d<\/p>\n

Three pillars of the IMF deal<\/strong><\/p>\n

1. Restrain and prioritise public sector spending<\/p>\n

2. Increase tax collection<\/p>\n

3. Strengthening the effectiveness of the Bank of Ghana’s monetary policy role<\/p>\n

IMF\u2019s take on Ghana\u2019s economic problem<\/strong><\/p>\n

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.<\/p>\n

\"imf\"<\/a><\/p>\n

“Inflation reached 17%<\/a><\/strong><\/span>, well above the Central Bank\u2019s inflation target.”<\/p>\n

IMF further noted that large fiscal deficit caused by a ballooning wage bill, poorly targeted energy subsidies and commodity price shocks pushed government debt and financing costs to very high levels, and made the economy more vulnerable to roll-over risks, despite the implementation of corrective measure in the last couple of years.<\/p>\n

“These domestic balances resulted in a weakened external position and pressure on the exchange rate, with international reserves covering just a few days of import coverage in September 2014,” the statement added.<\/p>\n

Why IMF<\/strong><\/p>\n

Government petitioned the IMF in \u00a02014<\/strong><\/a><\/span> for a possible bailout because of\u00a0high inflation rates<\/strong><\/a><\/span>, depreciation of the cedi<\/strong><\/a><\/span>, huge wage bill<\/strong><\/a><\/span>, among others.<\/p>\n

In early February 2015<\/strong><\/a> <\/span>Government said it had concluded most of the outstanding issues concerning the negotiations with the IMF.<\/p>\n

This was according to the Head of the Ghana\u2019s negotiation team, Dr. Kwesi Botchway who said the programme would\u00a0take off not later than April 2015 when the IMF Executive Board meets.<\/p>\n

–<\/p>\n

By: Godwin Allotey Akweiteh and Raymond Acquah\/citifmonline.com\/Ghana<\/p>\n

Follow @AlloteyGodwin<\/a>
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