Ghana gets $1b IMF financing for post-COVID economic recovery
Ghana has received the equivalent of $1 billion from the International Monetary Fund (IMF), being its share of the new Special Drawing Rights (SDRs) allocation to boost the post-COVID economic recovery of member countries.
On August 2, 2021, the IMF Board of Governors approved a general allocation of SDR456.5 billion, equivalent to $650 billion out of which about $33.7 billion is for African countries, to boost global liquidity and economic recovery following the devastating impact of the COVID-19 pandemic on lives and livelihoods.
A statement issued in Accra by the Ministry of Finance said the new SDR allocation, which became effective on August 23, 2021, would augment the additional financing needs of countries, especially low-income countries, caused by the impact of the pandemic on public finances.
It said the African Development Bank (AfDB) estimated that African governments required additional financing of about $484.6 billion within the next three years to close the financing gap and to emerge from the COVID-19 crisis stronger and more resilient.
According to the IMF, the SDR allocation would benefit all members, address the long-term global need for reserves, build confidence, and foster the resilience and stability of the global economy.
“This historic SDR allocation will particularly help countries that are most vulnerable to immediately address the impact of the pandemic towards economic recovery,” it said.
The statement said the SDR allocation was in response to a global call to action, following the devastating effects of the pandemic, including an Africa-wide effort championed by Finance Minister Ken Ofori-Atta and his colleague African Finance Ministers, the AU, UNECA, and supported by key international partners, including The IMF, The World Bank, The G20, and the European Union.
The Special Drawing Right (SDR) is an interest-bearing international reserve asset created by the IMF in 1969 to supplement member countries’ official reserves.
The general allocations of SDRs are distributed across the IMF membership in proportion to their IMF quota.
The Statement said Mr Ofori-Atta on behalf of the Government of Ghana, expressed gratitude to the IMF “for this historic advocacy and SDR allocation. It provides additional policy space to support Ghana’s efforts to counter the impact of the COVID-19 pandemic on lives and livelihoods.”
He said this would support the GH¢100 billion Ghana Cares (Obaatanpa) post-pandemic recovery programme, adding that the Ministry of Finance will ensure that all statutory requirements were complied within the use of the SDR.