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The International Monetary Fund has said that Ghana had the equivalent of $400m in it reserves at the time it requested for the Fund’s support back in 2014.
That meant the country had around seven days’ worth of imports in net foreign exchange reserves, according to Resident Representative to Ghana, Dr Albert Touna-Mama.
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.”
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.”
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.”
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.
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