IMF SDR allocation: US$300 million to go towards supporting 2022 budget

• Government is expected to access US$300 million for the 2022 budget

• The Fund is expected to go towards supporting economic recovery programmes

• The recent disbursement for Ghana was approved by the IMF 18 months ago

The Bank of Ghana has disclosed an injection of about US$300 million from International Monetary Fund’s Special Drawing Rights allocation would go towards supporting the 2022 budget of government.

According to a Graphic Business report, central bank Governor, Dr Ernest Addison, said the budgetary support which translates to GH¢1.7 billion is expected to enhance government spending to hasten post COVID-19 economic recovery and reduce government borrowing.

Addressing journalists on how the funds would be expended at the 102nd meeting of the Monetary Policy Committee of the central bank, the BoG Governor explained though the funds are meant to go towards balance of payment supports, the Bretton Woods Institution was preparing to allow member countries to use part of the funds for budget support.

“We have had some discussions with the government on that and as you know, SDRs are for balance of payment support but the IMF has decided that we may also use it for budget support. So, one has to make a judgement on where the pressures for the economy are and we agreed that we have to have very strong reserves,” the Dr Addison said.

“We also agree that, we have some strong fiscal pressures so we are ready to make about a third of that available to support the budget,” he added.

Earlier in August this year, the IMF made available US$1 billion, equivalent to SDR793 million for Ghana.

This forms part of a support to member countries to assistance them combat the pandemic and rebuild their economies from its impact.

Meanwhile, Finance Minister Ken Ofori-Atta had earlier said government will withdraw the entire US$1 billion made available to support key areas of the economy in a bid to fast-track growth.

He adds that government is also considering directing some of the funds towards its ambitious Ghana CARES programme.

The SDR allocation was first introduced for all countries as part of emergency response programme to the global recession following the Great Depression era.

The IMF allows for countries to access emergency financing disbursement under the Rapid Credit Facility.

The recent disbursement for Ghana was approved by the Fund 18 months ago as part of measures in fighting the Coronavirus pandemic.