GHANA and Senegal, two West African neighbours, joined 19 other African countries that got some boost from the International Monetary Fund (IMF) with the Executive Board approving for them substantial financial packages, independent statements from IMF’s headquarters have revealed.
While the IMF approved US$1 billion disbursement to Ghana to address the covis-19 pandemic to be drawn under its (IMF’s) Rapid Credit Facility, its Executive Board on the same day approved for Senegal a US$442 million disbursement under the Rapid Credit Facility and purchase under the Rapid Financing Instrument. The IMF did not make public any conditionalities to these packages.
According to the IMF, in a statement on Monday in Washington, D.C, the covid-19 pandemic is already impacting Ghana severely leading to the slowing down of growth as a result of tightening of financial conditions and an exchange rate that is under pressure.
According to the IMF, Ghanaian authorities have timely and proactively responded to contain the spread of the coronavirus pandemic and supported households and firms.
The statement reads in part: “The Executive Board of the International Monetary Fund (IMF) today approved the disbursement of SDR 738 million (about US$1 billion) to be drawn under the Rapid Credit Facility (RCF). The disbursement will help address the urgent fiscal and balance of payments needs that Ghana is facing, improve confidence, and catalyze support from other development partners.
“The COVID-19 pandemic is already impacting Ghana severely. Growth is slowing down, financial conditions have tightened, and the exchange rate is under pressure. This has resulted in large government and external financing needs. The authorities have timely and proactively responded to contain the spread of the COVID-19 pandemic in Ghana and support affected households and firms.
“The IMF continues to monitor Ghana’s situation closely and stands ready to provide policy advice and further support as needed.”
In the statement on a total of US$442 million disbursement package approved for Senegal, the IMF said it was the tenth request that the IMF Executive Board was approving for the West African nation for emergency financial assistance to enable it to address the challenges posed by the coronavirus.
The organization said the package was approved as the “economic impact of the COVID-19 pandemic is rapidly unfolding, with the near-term outlook deteriorating quickly,” although it acknowledged that Senegalese “authorities have acted fast by putting in place strong measures to help contain the spread of the disease and mitigate the pandemic’s impact on the economy.”
The Executive Board, the statement stated further, “today approved the purchase under the Rapid Financing Instrument (RFI) equivalent to SDR 215.7 million (about US$294.7 million, 67 percent of quota) and a disbursement under the Rapid Credit Facility (RCF) equivalent to SDR 107.9 million (US$147.4 million, 33 percent of quota) to help Senegal meet the urgent balance of payment needs stemming from the COVID-19 pandemic.”
The coronavirus pandemic is hitting Senegal hard, said the IMF, adding that the sharp global economic downturn and Senegal’s containment measures have led to a substantial reduction in its economic activities, with sectors such as tourism, transport, construction, and retail particularly hard-hit.
“The authorities have acted fast to mitigate the impact of the pandemic by increasing health spending and providing targeted support to vulnerable households and firms, including trough food aid, suspension of utility bills, and targeted tax relief. IMF financing will help preserve fiscal space and catalyze further assistance from the international community, preferably in the form of grants.
“The IMF continues to monitor Senegal’s situation closely and stands ready to provide policy advice and further support as needed,” the organization said.