An economist at the University of Ghana, Dr Priscilla Twumasi Baffour says the approval of Ghana’s $3 billion bailout request by the IMF was crucial.
She said the timing of the inflow of the first tranche has been perfect.
“I believe that it is important and that the money has come at the right time. Because as of last week thereabout, we were aware that the reserve of the Central Bank was about three weeks of import cover.
“And that meant that if nothing came in immediately, possibly it could have come in with a lot of speculations and people rushing in – the whole uncertainty around that environment is something that is not needed in economic management,” she said on JoyNews’ Newsfile on Saturday.
Dr Baffour explained that the country has a lot of goodwill globally, in that almost everybody wants to see “the shining star of Africa” perform excellently.
According to her, although data shows that the country turns out to perform well while under a fund-assisted programme, it begins to decline immediately after the programme expires.
She has, however, advised that the inflow of the first tranche of the $3 billion should not call for a massive celebration but government should “take advantage of the goodwill that we have and do the right things going forward.
Following the final approval of Ghana’s IMF programme, the first tranche of the $3 billion International Monetary Fund Extended Credit Facility (ECF) has been credited to the Bank of Ghana’s account.
The $600 million arrived in the late afternoon of Friday, May, 19.
In a tweet Finance Minister Ken Ofori-Atta stated that “The Bank of Ghana informs me that the first tranche of $600 million of Ghana’s low interest $3 billion ECF facility has been received.
“These funds will be used for BOP [Balance of Payment] and budget support and will also help stabilise the FX rate and trigger a cascading effect on inflation.”
Meanwhile, another tranche of funds is also expected to be disbursed by June 2023.
This will be followed by a visit by an IMF Mission to Ghana in June 2023 to review Ghana’s programme considerations.
Another review is expected just before the end of 2023, possibly in December 2023, before the final disbursement.
All the funds will be paid directly into the Bank of Ghana’s account to support Ghana’s balance of payments needs.