Ghana to receive 2nd tranche of IMF bailout package by July

Ghana will be in a position to request the disbursement of the second tranche of bailout financing from the International Monetary Fund (IMF) after July 15.

The government of Ghana could therefore receive an amount equivalent to 83.025 million Special Drawing Rights (SDR), a report received here Tuesday said.

SDR are supplementary foreign exchange reserve assets defined and maintained by the IMF. Their value is based on a basket of key international currencies reviewed by IMF every five years, such as U.S. dollars, euro, pounds sterling and Japanese yen.

Ghana's request for further disbursement during the second and third years of this arrangement are preconditioned and determined in the context of reviews under the Extended Credit Facility (ECF) arrangement.

The Ghanaian authorities requested a three-year arrangement under the ECF amounting to 664.20 million SDR or 918 million U.S. dollars in support of the Ghana medium-term economic reform program.

The first disbursement is an amount equivalent to 83.025 million SDR approved at the request of Ghana soon after the Executive Board approved of the three-year program.

Finance Minister Seth Terkper said the amount would be channeled to the Bank of Ghana to shore up its import cover.

The governments' three-year ECF-support program, anchored on the second Ghana Shared Growth and Development Agenda (GSGDA II), aims at a sizeable and frontloaded fiscal adjustment to restore debt sustainability, rebuild external buffers, and eliminate fiscal dominance of monetary policy, while safeguarding financial sector stability.

It focuses on substantially strengthening the fiscal position by mobilizing additional revenues, restraining the wage bill and other primary spending while making space for priority spending.

The government is also taking additional adjustment measures to help offset lower-than-budgeted oil revenue. A prudent borrowing policy will also complement fiscal consolidation efforts to restore debt sustainability.

However, the statement said that "risks to the program include delayed or partial implementation of policies, including election year spending next year in the run-up to elections, a slower growth recovery if the electricity crisis is not addressed quickly, and additional negative commodity price shocks."

In the 2015 budget approved by parliament, total revenue and grants were projected to increase from 18.4 percent of GDP in 2014 to about 21 percent in 2015.

Total expenditure, on the other hand, was programmed to decline only slightly from 27.8 percent of GDP in 2014 to 27.4 percent in 2015. Endi