Ghana has received the equivalent of US$1 billion from the International Monetary Fund (IMF), the Ministry of Finance has announced.
A statement issued by the ministry on Friday (27 August) said the money is Ghana’s share of the new Special Drawing Rights (SDRs) allocation to boost post-COVID economic recovery in IMF member countries.
On 2 August 2021, the IMF board of governors approved a general allocation of SDR456.5 billion, equivalent to $650 billion, out of which roughly $33.7 billion is for African countries.
The SDR injection is intended to boost global liquidity and economic recovery to counter the devastating effects of the COVID-19 pandemic on lives and livelihoods.
The new SDR allocation, which became effective on 23 August 2021, will support the additional financing needs of IMF member states, especially low-income countries, caused by the impact of the pandemic on public finances.
The African Development Bank (AfDB) estimates that African governments require additional financing of approximately $484.6 billion over the next three years to close the financing gap and emerge from the COVID-19 crisis stronger and more resilient.
According to the IMF, the SDR allocation will benefit all members, address the long-term global need for reserves, build confidence and foster the resilience and stability of the global economy. This historic SDR allocation will particularly help those countries that are most vulnerable to address the impact of the pandemic immediately and start to build towards recovery.
Africa’s response
The SDR allocation is in response to a global call to action to counter the worst effects of the pandemic.
The push for a concerted response includes an Africa-wide effort, championed by Ghana’s Minister for Finance, Ken Ofori-Atta, and his colleague African finance ministers, together with the African Union and the United Nations Economic Commission for Africa (UNECA), with support from leading international partners who include the IMF, World Bank, G20 and European Union.
The Special Drawing Right is an interest-bearing international reserve asset, created by the IMF in 1969 to supplement member countries’ official reserves. General allocations of SDRs are distributed across the IMF membership in proportion to their IMF quota.
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