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On April 13, 2020, the IMF Executive Board approved the disbursement of US$1 billion to be drawn under the Rapid Credit Facility; The COVID-19 pandemic is already impacting Ghana severely. Growth is slowing down, financial conditions have tightened, and the exchange rate is under pressure; The authorities have timely and proactively responded to contain the spread of the COVID-19 pandemic in Ghana and support affected households and firms.
The Executive Board of the International Monetary Fund (IMF) approved the disbursement of SDR 738 million (about US$1 billion) to be drawn under the Rapid Credit Facility (RCF). The disbursement will help address the urgent fiscal and balance of payments needs that Ghana is facing, improve confidence, and catalyze support from other development partners.
The COVID-19 pandemic is already impacting Ghana severely. Growth is slowing down, financial conditions have tightened, and the exchange rate is under pressure. This has resulted in large government and external financing needs. The authorities have timely and proactively responded to contain the spread of the COVID-19 pandemic in Ghana and support affected households and firms.
The IMF continues to monitor Ghana’s situation closely and stands ready to provide policy advice and further support as needed.
Following the Executive Board’s discussion of Ghana, Mr. Zhang, Deputy Managing Director and Chair, issued the following statement:
“The COVID-19 pandemic is impacting Ghana severely. Growth is projected to slow down, financial conditions have tightened, and the exchange rate is under pressure. The budget deficit is projected to widen this year given expected lower government revenues and higher spending needs related to the pandemic. The Fund’s emergency financial assistance under the Rapid Credit Facility will help address the country’s urgent financing needs, improve confidence, and catalyze support from other international partners.
“The authorities’ response has been timely, targeted, and proactive, focused on increasing health and social spending to support affected households and firms. The Central Bank has recently taken steps to ensure adequate liquidity, preserve financial stability, and mitigate the economic impact of the pandemic, while allowing for exchange rate flexibility to preserve external buffers.
“The uncertain dynamics of the pandemic creates significant risks to the macroeconomic outlook. Ghana continues to be classified at high risk of debt distress. The authorities remain committed to policies consistent with strong growth, rapid poverty reduction, and macroeconomic stability over the medium-term.
“Additional support from other development partners will be required and critical to close the remaining external financing gap and ease budget constraints.”
| Table 1. Ghana: Selected Economic and Financial Indicators, 2018-25 | ||||||||
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | |
| Est. | Prel. | Proj. | Proj. | Proj. | Proj. | Proj. | Proj. | |
| (Annual percentage change; unless otherwise indicated) | ||||||||
| National accounts and prices | ||||||||
| GDP at constant prices | 6.3 | 6.1 | 1.5 | 5.9 | 3.3 | 7.1 | 4.4 | 4.3 |
| Non-oil GDP | 6.5 | 5.2 | 1.8 | 5.8 | 4.4 | 4.8 | 4.8 | 4.8 |
| Oil and gas GDP | 3.6 | 17.0 | -2.1 | 6.1 | -9.0 | 38.4 | 0.0 | -1.3 |
| Real GDP (nonoil) | 6.5 | 5.2 | 1.8 | 5.8 | 4.4 | 4.8 | 4.8 | 4.8 |
| Real GDP per capita | 4.1 | 4.0 | -0.5 | 4.2 | 0.8 | 4.5 | 1.7 | 1.7 |
| GDP deflator | 10.2 | 8.8 | 9.3 | 8.3 | 7.3 | 6.4 | 6.5 | 6.4 |
| Consumer price index (annual average)1 | 9.8 | 7.2 | 9.7 | 8.5 | 7.8 | 6.8 | 6.1 | 6.0 |
| Consumer price index (end of period)1 | 9.4 | 7.9 | 9.9 | 8.2 | 7.4 | 6.2 | 6.0 | 6.0 |
| (Percent of GDP) | ||||||||
| Gross capital formation | 14.9 | 16.2 | 12.3 | 15.5 | 16.6 | 17.8 | 19.1 | 20.7 |
| Government | 1.5 | 1.8 | 2.2 | 1.8 | 1.7 | 1.8 | 2.0 | 2.4 |
| Private | 13.4 | 14.4 | 10.2 | 13.8 | 14.9 | 16.1 | 17.2 | 18.3 |
| National savings | 11.7 | 14.4 | 7.0 | 10.4 | 11.4 | 13.3 | 15.6 | 17.7 |
| Government | -5.5 | -5.6 | -7.9 | -3.8 | -3.9 | -3.7 | -3.6 | -3.1 |
| Private2 | 17.2 | 20.0 | 14.9 | 14.2 | 15.3 | 17.1 | 19.1 | 20.8 |
| Foreign savings | -3.1 | -2.7 | -4.5 | -3.0 | -3.3 | -3.2 | -2.7 | -2.9 |
| Central government budget (cash basis) | ||||||||
| Revenue | 14.5 | 14.3 | 13.5 | 15.1 | 15.1 | 15.1 | 15.2 | 15.2 |
| Expenditure | 21.5 | 21.8 | 23.0 | 20.1 | 20.1 | 20.1 | 20.2 | 20.3 |
| o/w financial and energy sector related costs | 3.3 | 2.7 | 3.1 | 1.0 | 1.0 | 1.0 | 1.0 | 0.9 |
| Overall balance3 | -7.0 | -7.5 | -9.5 | -5.0 | -5.0 | -5.0 | -5.0 | -5.0 |
| Overall balance excluding financial and energy sector related costs3 | -3.7 | -4.7 | -6.4 | -4.0 | -4.1 | -4.0 | -3.9 | -4.1 |
| Primary balance3 | -1.4 | -1.8 | -4.1 | 0.0 | 0.5 | 0.1 | -0.1 | -0.4 |
| Primary balance excluding financial and energy sector related costs3 | 1.9 | 0.9 | -1.0 | 1.0 | 1.5 | 1.1 | 0.9 | 0.5 |
| Central government debt (gross) | 59.0 | 63.2 | 68.7 | 67.2 | 66.2 | 65.1 | 64.1 | 63.2 |
| Domestic debt4 | 30.1 | 30.8 | 30.1 | 32.8 | 31.8 | 32.3 | 34.8 | 37.6 |
| External debt | 28.9 | 32.4 | 38.6 | 34.4 | 34.4 | 32.8 | 29.3 | 25.6 |
| (Annual percentage change; unless otherwise indicated) | ||||||||
| Money and credit | ||||||||
| Credit to the private sector (commercial banks) | 11.2 | 18.3 | 4.7 | 13.7 | 14.8 | 14.9 | 15.7 | 16.0 |
| Broad money (M2+) | 15.4 | 21.6 | 10.4 | 15.5 | 12.5 | 14.8 | 20.3 | 19.0 |
| Velocity (GDP/M2+, end of period) | 3.9 | 3.7 | 3.8 | 3.8 | 3.8 | 3.8 | 3.8 | 3.8 |
| Base money | 0.2 | 33.6 | 1.9 | 18.5 | 14.4 | 16.9 | 24.1 | 22.1 |
| Bank lending rate (weighted average, percent) | 26.9 | … | … | … | … | … | … | … |
| Policy rate (in percent, end of period) | 17.0 | … | … | … | … | … | … | … |
| (Percent of GDP) | ||||||||
| External sector | ||||||||
| Current account balance | -3.1 | -2.7 | -4.5 | -3.0 | -3.3 | -3.2 | -2.7 | -2.9 |
| Gross international reserves (millions of US$) | 5,317 | 6,634 | 5,310 | 5,538 | 5,612 | 5,614 | 5,986 | 6,031 |
| in months of prospective imports of goods and services | 2.6 | 3.4 | 2.7 | 2.7 | 2.7 | 2.6 | 2.7 | 2.6 |
| Net international reserves (millions of US$) | 3,906 | 5,247 | 4,011 | 4,353 | 4,553 | 4,683 | 5,222 | 5,544 |
| in months of prospective imports of goods and services | 1.9 | 2.7 | 2.1 | 2.1 | 2.2 | 2.2 | 2.4 | 2.4 |
| Total donor support (millions of US$) | 612 | 826 | 514 | 579 | 1,110 | 663 | 677 | 482 |
| in percent of GDP | 0.9 | 1.2 | 0.8 | 0.9 | 1.6 | 0.9 | 0.8 | 0.6 |
| Memorandum items: | ||||||||
| Nominal GDP (millions of GHc) | 300,596 | 347,187 | 385,251 | 441,791 | 489,735 | 558,161 | 620,390 | 688,076 |
| National Currency per U.S. Dollar (period average) | 4.6 | 5.2 | … | … | … | … | … | … |
| GDP per capita (US$) | 2,217 | 2,229 | 2,085 | 2,121 | 2,192 | 2,319 | 2,398 | 2,494 |
| Central Government Debt excluding ESLA bond | 56.6 | 61.1 | 66.8 | 65.5 | 64.7 | 63.8 | 62.9 | 62.1 |
| Sources: Ghanaian authorities; and Fund staff estimates and projections. 1 The CPI was rebased in September 2019. The historical figures reflect assumptions by IMF staff, and will be revised once an official historical linked series is available. 2 Including public enterprises. 3 Excludes discrepancy. 4 Includes Energy Sector Levy Act bond. | ||||||||
Distributed by APO Group on behalf of International Monetary Fund (IMF).
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