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BoG had 7 days worth of imports before requesting Fund’s support – IMF

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BoG had 7 days worth of imports before requesting Fund’s support – IMF

BoG had 7 days worth of imports before requesting Fund’s support – IMF

The International Monetary Fund’s Resident Representative to Ghana says when Ghana officially requested for the Fund’s support back in 2014, the country only had around seven days’ worth of imports in net foreign exchange reserves, equivalent to $400 million.

In an article, Dr Albert Touna-Mama said, “When Ghana officially requested the Fund support on August 8, 2014, the cedi had depreciated by 40 per cent, inflation was in the double-digits, and the Bank of Ghana only had around seven days’ worth of imports in net foreign exchange reserves, equivalent to $400 million.”

Read Also:  Government Borrowing From The Bank of Ghana In Excess Is Harming The Cedi: Economist

He added, “In the first half of 2014, the fiscal deficit was almost exclusively financed by BoG printing money for an amount equivalent to 22 per cent of the previous year’s fiscal revenue, compared with a target of only 5 per cent, as alternative financing sources were drying up fast. Interest rates stood at around 24–25 per cent on domestic debt.”

Read Also:  No Foreign Exchange Support For Imports of Rice, Poultry & Veg. Oil: BoG Instructs Banks

According to Dr Touna-mama, “The generous terms of the Fund financing provided Ghana with the needed breathing space to avoid resorting to measures that are harmful to national prosperity.”

“For instance, the Government was able under the programme not to accrue new arrears while at the same time adopting a clearance plan to deal with legacy arrears.”

Read Also:  No Foreign Exchange Support For Imports of Rice, Poultry & Veg. Oil: BoG Instructs Banks

The IMF Executive Board approved a $918 million loan to Ghana in 2015 to support a reform program aimed at faster growth and job creation while protecting social spending.

Source: Myjoyonline.com

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