Economy

IMF funds will give confidence to external creditors

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By Eugene Davis

The Chairman of Parliament’s Roads and Transport, Kennedy Osei Nyarko, has indicated that the International Monetary’s Fund’s (IMF) imminent disbursement of US$600m first loan tranche will aid the country’s economic recovery as well as give confidence to external creditors as to the way forward regarding disbursement for road projects.

Government is undertaking major road projects across the country; however, some have stalled due to lack of funds and according to Mr. Osei Nyarko, who is also the Member of Parliament for Akim Swedru, the final outcome of the IMF negotiations will enable government take a decision on its external creditors.

Speaking with Business24/Investment Times in an exclusive interview on the greater impact the disbursement will have on the economy, he said “Roads are ongoing, there is a big project on the Nsawam stretch which is being funded by government of Ghana, it is an extended credit facility but because of the economic difficulties, government decided to suspend its debt/loan servicing, so all those creditors also decided to suspend disbursement of loans.

It is when the disbursement comes that the work or project can continue.  They were all waiting to hear the decision government will take or the outcome of government’s negotiations with the IMF -now thankfully, government is at the tail end of negotiations with IMF and I am sure the moment they finish, they will take a final decision and the creditors will know the way forward.

Government expects the IMF to approve a first loan tranche of $600 million as soon as tomorrow [Wednesday], paving the way for disbursement within a week, government officials have said.

Ghana is seeking $3 billion from the Fund to shore up its battered economy.

Further, Mr. Osei Nyarko said the near release of the funds will help government meet its expenditure target.

“The IMF money will help -it is essentially a balance of payment support which government will deposit in the central bank coffers to shore up our reserves, the moment that happens, it strengthens our cedi which will translate into things easing a bit.”

He also commended government for the measures being put in place to stabilize the economy “I think government is on track and it is the hope that by December inflation target of 21percent can be attained and we hope that if that happens prices of goods and services will fall drastically, that is our expectation.

The MP for Akim Swedru also backed the reduction of prices of fuel in the second pricing window of May 2023, and expressed the hope that it lingers on for the benefit of Ghanaians.

The second tranche of $600 million is expected to be approved after a successful first review of the programme, sometime in November or December, with the rest disbursed in equal tranches of $360 million after semi-annual reviews.

The IMF funds will boost Ghana’s coffers and help it work towards the target of foreign reserves amounting to the equivalent of three months of imports by 2026.

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