Govt runs back to the IMF -Outlines measures to mitigate fiscal impact of Covid 19
President Nana Addo Dankwa Akufo Addo
Exactly a year after exiting the four year extended credit facility (ECF) programme of the International Monetary Fund (IMF), the country is once again back to the Bretton Woods institution.
This time round, the country is not seeking an economic bailout programme, but rather, a request to Secure the IMF’s Rapid Credit Facility of GHȼ3.14 billion to help close the fiscal gap that has been created by the Covid 19 outbreak.
A preliminary assessment of the fiscal impact of the virus by the Ministry of Finance, has indicated that the outbreak will cost the country in excess of GH¢11 billion.
Addressing members of Parliament on March 30, the Minister of Finance, Mr Ken Ofori Atta outlined measures to help close the fiscal gap. Other measures included a request to lower the cap on the Ghana Stabilisation Fund (GSF) from the current US$300 million to US$100 million in accordance with Section 23 (3) of the Petroleum Revenue Management Act (PRMA).
He said this measure would enable the excess amount in the GSF account over the US$100 million cap to be transferred into the Contingency Fund which will then be used to fund the Coronavirus Alleviation Programme.
The Ministry is also arranging with the bank of Ghana to defer interest payments on non-marketable instruments estimated at GHȼ1.22 billion to 2022 and beyond; adjust expenditures on Goods & Services and Capex downwards by GHȼ1.24 billion and secure a World Bank facility of GHȼ1.71 billion.
He said the ministry also intends to reduce the proportion of Net Carried and Participating Interest due the Ghana National Petroleum Corporation from 30 percent to 15 per cent; and also amend the PRMA to allow a withdrawal from the Ghana Heritage Fund to undertake urgent expenditures in relation to the Coronavirus pandemic.
There is an estimated US$591.1 million in the Ghana Heritage Fund currently.