IMF Bailout: This is the right time for the IMF Money – Economist.
IMF Bailout: Dr. Priscilla Twumasi Baffour, an economist at the University of Ghana, argues that the IMF’s acceptance of Ghana’s $3 billion bailout request was essential. She said that the first tranche’s inflow came at the ideal time.
“I think it’s significant and that the funding arrived at the appropriate moment. We knew that the Central Bank’s reserve was around three weeks’ worth of import coverage as of last week or thereabouts.
“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 said the nation enjoys a great deal of goodwill internationally because almost everyone wants to see “the shining star of Africa” perform well.
She claims that despite data showing the country to do well while it is a part of a project with funding support, it quickly starts to fall behind when the initiative ends.
She has, however, stated that the government should “take advantage of the goodwill that we have and do the right things going forward,” rather than throwing a huge party in response to the first tranche of the $3 billion being received.
The $3 billion International Monetary Fund Extended Credit Facility (ECF) has been credited to the Bank of Ghana’s account after the IMF’s plan for Ghana received final clearance.
Late in the afternoon of May 19, the $600 million came.
The Bank of Ghana informed me that the first $600 million of Ghana’s $3 billion ECF facility had been received, according to a tweet from Finance Minister Ken Ofori-Atta.
These monies will be utilised to support the budget and the BOP, as well as to stabilise the FX rate and start a chain reaction that raises inflation.
By June 2023, another tranche of money is also anticipated to be distributed.
An IMF Mission will then travel to Ghana in June 2023 to examine Ghana’s plan considerations.
Before the final distribution in 2023—possibly in December 2023—another evaluation is anticipated.
To assist Ghana’s balance of payments needs, all the money will be sent straight into the Bank of Ghana’s account.