Gov’t reaches out to World Bank, IMF to tackle Covid-19

Minister for Finance Ken Ofori-Atta has told Parliament that the government will be falling on the Bretton Woods institutions to secure two facilities to tackle the coronavirus pandemic.

The separate facilities are expected to shore up the country’s case management and preparedness for the disease.

“We are currently in discussion with the World Bank to tap into a US$12 billion World Bank Group fast-track COVID-19 facility to help close the financing gap. With Ghana also chairing the development committee of the World Bank, we are having quite a bit of influence in encouraging the bank to also look at the fragile states on the continent to give them grants immediately,” he said.

In addition, the government is discussing with the International Monetary Fund (IMF) to access part of a US$10 billion Rapid Credit Facility made available by the IMF to member countries to address the pandemic.

Discussions have also begun with other multilateral and bilateral partners on potential assistance to close the financing gap, the Minister said.

On whether there are any conditionalities attached to the facilities, he explained: “The IMF facility that we are looking at is a Rapid Credit Facility, and that will come to Parliament. It is typically a zero-interest-rate, five-year moratorium and five-year [re]payment [facility] with no strings attached. This is the type of facility they used for Mozambique during the Idai disaster.”

Even though the impact of the coronavirus is still unfolding, the preliminary analysis undertaken by the Ministry of Finance shows that it will impact negatively on petroleum receipts—due to the collapse of international crude oil pricesd—customs receipts, expenditures (especially health-related), and financing conditions on the fiscal front.

More generally, it is affecting tourism, travel and conferences, foreign direct investments, international trade, food and nutrition, and poverty reduction.

Mr. Ofori-Atta further informed lawmakers that measures are being put in place to close a possible financing gap in the 2020 budget occasioned by the effects of the pandemic. These measures may include withdrawal from the Ghana Stabilisation Fund, he said.

Minority wants accountability

The Minority spokesperson on finance, Cassiel Ato Forson, asked for a breakdown of how the monies that will be secured are going to be used, insisting that the funds must be used strictly for their intended purpose.

According to him, the Minister failed to provide details of the initial US$100 million anti-coronavirus funding announced by the President, calling it a “missed opportunity”.

“We think as a matter of urgency he should appear before us and give us the breakdown and background to that information because it is important for us to be aware. What is happening is bad and scary, but we still have to do what is required of us by ensuring value for money, due diligence, and making sure we perform our oversight responsibility for expenditure,” he added.

Source : Business24