IMF's US$360 million inflow is peanut compared with our FX needs - Dr. Kwakye

Following the International Monetary Fund’s (IMF) approval of the second review of the country’s Extended Credit Facility (ECF) arrangement, the Director of Research at the Institute of Economic Affairs (IEA), Dr. John Kwakye, has described the US$360 million received by government as peanut.

According to him, the third tranche — US$360 million — could not solve Ghana's problems, looking at the country’s foreign exchange market.

In a post on X sighted by GhanaWeb Business, the IEA boss said the local economy will be put on a sound footing only if the government takes ownership of the country’s natural resources and rakes in more money to help stabilize the Cedi.

Dr. Kwakye stated categorically that this was the only sustainable way to prevent the Cedi from depreciating against major trading currencies — dollars and pounds sterling.

He said, “Relying on IMF disbursements to bolster the cedi isn’t sustainable. The US$360 mn inflow is peanuts compared with our FX needs. Taking ownership of our natural resource wealth to support the cedi is the only sustainable option."

The disbursement of the third tranche of the IMF bailout package — US$360 million — brings the total disbursement to US$1.56 billion.

In a statement issued, the IMF said Ghana’s performance under the programme has been generally strong, with all quantitative performance criteria for the second review and almost all indicative targets met.

It said the country has made progress on its debt restructuring programme and key structural reforms were advancing.

To help stabilise the economy, the government, as part of measures to tame high inflation, announced on July 1, 2022, its decision to seek a $3 billion financial bailout programme from the International Monetary Fund (IMF).

Subsequently, a team from the IMF arrived in the country from July 6 to July 13, 2022, to engage with Ghanaian authorities for a possible economic support program.

A staff-level agreement between the Government of Ghana and the IMF was reached in December 2022.

On May 17, 2023, the IMF's executive board approved Ghana's $3 billion loan facility.

The first tranche of $600 million was received by the Bank of Ghana (BoG) on Friday, May 19, 2023.

The IMF programme, according to the government, is aimed at restoring macroeconomic stability and safeguarding debt sustainability, among many other objectives.

SA/NOQ

Read Dr Kwakye's tweet below;

https://t.co/aa89WArkMb. Relying on IMF disbursements to bolster the cedi isn't sustainable. The US$360 mn inflow is peanuts compared with our FX needs. Taking ownership of our natural resource wealth to support the cedi is the only sustainable option.

— J. K. Kwakye (@JohnKwabenaKwa1) July 10, 2024