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Ghana to receive $600m budgetary support from World Bank – Country Director

The World Bank Country Director(Ghana), Pierre Frank Laporte has said Ghana likely to receive about 600 million dollars as balance of payment supp

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The World Bank Country Director(Ghana), Pierre Frank Laporte has said Ghana likely to receive about 600 million dollars as balance of payment support for next year’s budget.

He revealed this in an interview with TV3’s Paa Kwesi Asare on the Business Focus programme.

“If Ghana is able to meet all the criteria and is going to get a budget support from the World Bank, how much are we looking at” asked Paa Kwesi Asare.

In answer, Mr Laporte said “Normally, there is a hard rule and soft rule, we can give around 30 to 40 per cent of the country’s budget support and for Ghana we are looking around $600million. Ghana’s envelope for the next three years is $1.5billion,” he said.

He further asked Ghana to quicken its move to get a programme under the International Monetary Fund (IMF) to deal with the economic challenges.

For him, the country will find it tough dealing with the domestic challenges without the support.

“There is an urgency, Ghana needs to tackle these problems with urgency. What is happening in the few months is that inflation has gone up partly because of what is happening upside but also party because the currency has depreciated,” he said.

Mr Laporte added “From where I sit, if nothing happens it will be very difficult for Ghana to find another way out domestic debt structuring is very difficult. Why? Because typically banks will invest in government papers, bonds and when you ask banks to care of stuffs like that it affects the capital adequacy and it pits at risk these banks where by international debt are easier to reschedule or restructure.”
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Ghana is seeking a programme under the Fund.

The Managing Director of the IMF Kristalina Georgieva stated that a deal between Ghana and the IMF should be reached and finalized before the end of the year.

In a closed-door meeting with President Nana Addo Dankwa Akufo-Addo on Monday, September 5, on the sidelines of the Africa Adaptation Summit, in Rotterdam, Netherlands, she told him “we understand the urgency, and we will move as quickly as possible”.
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Describing Ghana as a “superb country”, she reiterated the determination of the Fund to work with Government and the Ministry of Finance, and ensure that an agreement is in place before the end of the year.

On his part, President Akufo-Addo indicated to the IMF boss that a lot of work has been done by Cabinet and the Ministry of Finance, and the document to be presented by the Ghana side “is ready for the scrutiny of the IMF”.

Meanwhile, Kristalina Georgieva has emphasized that Ghana’s current economic challenges are not locally generated but from external shocks.

Speaking on the sidelines of the Fund’s engagements with the Ghanaian delegation, Kristalina Georgieva stated that contrary to the narrative that Ghana is not in these challenges because of any bad policies of the Akufo-Addo administration, the IMF boss stated that the factors are exogenous.

“We have started very constructive discussions already and to the people of Ghana, like everybody on this planet, you have been hurt by exogenous shocks,” she said.

She mentioned the extraneous factors which have contributed to Ghana’s economic woes, leading to the West African country seeking a programme from the IMF.
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“First the pandemic, then Russia’s war in Ukraine. We need to realize thar it is not because of bad policies in the country but because of this combination of shocks, and, therefore, we have to support Ghana,” she said.

She also indicated that Ghana is a member of the IMF, “a strong country with fantastic people”, and as such it is incumbent on the Fund to lend the country support.

Kristalina Georgieva also indicated “we have to support Ghana because your strength contributes to the strength of your neighbours; it contributes to a stronger world”.

Ghana is before the IMF for $3 billion to help the country navigate through the hostile economic crisis it finds itself in as a result of the adverse effects of the deadly coronavirus pandemic and the ongoing conflict between Russia and Ukraine.