Following the approval of its Executive Board, the International Monetary Fund (IMF) has disbursed to Ghana the second tranche of $600 million under the country’s three-year Extended Credit Facility (ECF) arrangement.
It will be recalled that the country received the first IMF payout of $600 million in May, last year.
That amount was to be used to help reduce interest payment on loans, debt levels and budget deficit, as the government was seeking to restore macroeconomic stability and make the country’s debt sustainable.
Today, we hear that the second tranche of the IMF payout has been given to the country because its performance under the EFC has been strong and compelling, as all quantitative performance criteria for the first review and almost all indicative targets and structural benchmarks have been met. (See our lead story).
We see this reason as confirmation of the government’s prudent disbursement of the first tranche and also strict adherence to the conditions spelt out by the IMF.
It is heart-warming that the fruitful performance of the government, which resulted in the release of the second tranche, will pave the way for additional funds, namely US$300 million disbursement from the World Bank under the Development Policy Operation Financing by the end of February; and $250 million to support the Ghana Financial Stability Fund.
It is our hope that the government would put up even a better performance with the second tranche, to strengthen IMF confidence in the country’s economy and consequently have no issues releasing the remaining tranches.
We are happy to learn that the present funds would go into general budget support and specifically be allocated to areas such as education, health and road to bolster the country’s economic recovery efforts.
Our joy is for the fact education, health and roads are critical areas but there are many issues with these sectors in the country that need fixing.
For instance, one wonders why it has taken so long to fix defects on the Aflao-Accra-Cape Coast-Takoradi-Elubo road, an international route.
Besides, there are complaints about bad roads in the country that prevent people from effectively and profitably carrying out their economic activities.
Some farmers, for example, find it very difficult to move their produce to marketing centres because of bad roads and in the end they suffer post-harvest losses with all the implications.
With regard to health, the government must provide needy communities with hospitals to reduce the challenges they face in accessing healthcare.
For education, it is a pity that there are some communities that lack basic schools and children from such communities have to go to school in other communities, mostly at their peril.
Sometimes even some of the communities which have them cannot boast of the schools because they are dilapidated or lack facilities of a modern-day basic school.
Roads, schools and health facilities are classified as pro-poor because of their impact in poverty-alleviation programmes.
Therefore, as we commend the government for the good performance with the first tranche of the IMF payout, we encourage it to not lose its focus on prioritising the education, road and health sectors with the second tranche.
