US$1bn IMF loan isn't because Akufo-Addo has mismanaged the economy - Kweku Baako

Editor-in-Chief of the New Crusading Guide, Kweku Baako Jnr. says the International Monetary Fund (IMF) $1 billion loan facility to the Government of Ghana is not because President Nana Akufo-Addo has mismanaged the economy.

According to Finance Minister, Ken Ofori-Atta, the loan was transferred into Ghana’s account to be used to mitigate the impact of the raging coronavirus (COVID-19) pandemic affecting the lives of the people and the economy at large.

He emphasized that the IMF loan is interest-free, hence there are no conditionalities attached to the grant.

But members of the NDC have chided the government for reverting to the IMF when they rebuked the Mahama government for borrowing from the same entity.

Kweku Baako, setting the record straight on Peace FM's 'Kokrokoo', disclosed that the IMF loan facility under the Akufo-Addo administration serves a different purpose and therefore asked the opposition National Democratic Congress to stop scoring political points with the issue.

"We haven't gone back to IMF because we (government) have mismanaged and going for the program. There's a distinction. This return to IMF, quote-unquote, is not the same IMF entry we made in 2015 or so . . . The conditions, the circumstances and indeed the conditionalities and other things are totally different. So, you can't do that. When you do that, you actually ridiculing the situation and indeed you're inviting people to look from a purely political perspective," he said.

IMF Executive Board approves a US$1 bn disbursement to Ghana to address COVID-19 Pandemic

IMF Executive Board approves a US$1 billion disbursement to Ghana to address the COVID-19 Pandemic.

On April 13, 2020, the IMF Executive Board approved the disbursement of US$1 billion to be drawn under the Rapid Credit Facility.

The disbursement will help address the urgent fiscal and balance of payments needs that Ghana is facing, improve confidence, and catalyze support from other development partners.

Following the Executive Board’s discussion of Ghana, Mr. Zhang, Deputy Managing Director and Chair, issued the following statement:

“The COVID-19 pandemic is impacting Ghana severely. Growth is projected to slow down, financial conditions have tightened, and the exchange rate is under pressure. The budget deficit is projected to widen this year given expected lower government revenues and higher spending needs related to the pandemic. The Fund’s emergency financial assistance under the Rapid Credit Facility will help address the country’s urgent financing needs, improve confidence, and catalyze support from other international partners.

“The authorities’ response has been timely, targeted, and proactive, focused on increasing health and social spending to support affected households and firms. The Central Bank has recently taken steps to ensure adequate liquidity, preserve financial stability, and mitigate the economic impact of the pandemic, while allowing for exchange rate flexibility to preserve external buffers.

“The uncertain dynamics of the pandemic creates significant risks to the macroeconomic outlook. Ghana continues to be classified at high risk of debt distress. The authorities remain committed to policies consistent with strong growth, rapid poverty reduction, and macroeconomic stability over the medium-term.

“Additional support from other development partners will be required and critical to close the remaining external financing gap and ease budget constraints.”