The World Bank Country Director for Ghana, Pierre Frank Laporte, has informed that Ghana is likely to get around 600 million dollars in balance of payment support for next year’s budget.
He announced this in an interview with Paa Kwesi Asare of TV3’s Business Focus.
“If Ghana is able to meet all the criteria and is going to get a budget support from the World Bank, how much are we looking at” asked Paa Kwesi Asare.
In answer, Mr Laporte said “Normally, there is a hard rule and soft rule, we can give around 30 to 40 per cent of the country’s budget support and for Ghana we are looking around $600million. Ghana’s envelope for the next three years is $1.5billion,” he said.
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He also urged Ghana to speed its application for an International Monetary Fund (IMF) program to address the country’s economic issues.
For him, the country will find it tough dealing with the domestic challenges without the support.
“There is an urgency, Ghana needs to tackle these problems with urgency. What is happening in the few months is that inflation has gone up partly because of what is happening upside but also party because the currency has depreciated,” he said.
Mr Laporte added “From where I sit, if nothing happens it will be very difficult for Ghana to find another way out domestic debt structuring is very difficult. Why? Because typically banks will invest in government papers, bonds and when you ask banks to care of stuffs like that it affects the capital adequacy and it pits at risk these banks where by international debt are easier to reschedule or restructure.”
Ghana is looking for a program under the Fund.
The IMF’s Managing Director, Kristalina Georgieva, suggested that an agreement between Ghana and the IMF should be negotiated and concluded before the end of the year.
In a closed-door discussion with President Nana Addo Dankwa Akufo-Addo on the sidelines of the Africa Adaptation Summit in Rotterdam, Netherlands, on Monday, September 5, she informed him, “we understand the urgency, and we will move as as quickly as possible.”
President Akufo-Addo, for his part, told the IMF boss that a lot of work had been done by Cabinet and the Ministry of Finance, and that the paper to be provided by the Ghana side “is ready for the IMF’s scrutiny.”
Meanwhile, Kristalina Georgieva has stressed that Ghana’s present economic woes are the result of external shocks rather than domestic factors.
Speaking on the sidelines of the Fund’s discussions with the Ghanaian delegation, Kristalina Georgieva highlighted that, contrary to the narrative that Ghana is in these difficulties as a result of bad policies implemented by the Akufo-Addo administration, the issues are external.
“We have started very constructive discussions already and to the people of Ghana, like everybody on this planet, you have been hurt by exogenous shocks,” she said.
She emphasized the external reasons that have contributed to Ghana’s economic troubles, prompting the West African country to seek an IMF program.
“First the pandemic, then Russia’s war in Ukraine. We need to realize thar it is not because of bad policies in the country but because of this combination of shocks, and, therefore, we have to support Ghana,” she said.
She also indicated that Ghana is a member of the IMF, “a strong country with fantastic people”, and as such it is incumbent on the Fund to lend the country support.
Kristalina Georgieva also indicated “we have to support Ghana because your strength contributes to the strength of your neighbours; it contributes to a stronger world”.
Ghana has asked the IMF for $3 billion to help the country navigate through the hostile economic situation caused by the deadly coronavirus outbreak and the ongoing conflict between Russia and Ukraine.
SOURCE: 3NEWS
