Media and Civil Society must police Govt to ensure proper use of $1.150 billion January inflows from IMF and World Bank- Sa-ad Iddrisu writes
In an important financial development, on Saturday, January 20th, the International Monetary Fund (IMF) granted approval for Ghana’s second tranche payment of $600 million. This decision was made following the successful negotiation of a debt restructuring agreement amounting to $5.4 billion with official creditors. The completion of this condition was crucial for the government to gain access to the second tranche of the IMF bailout.
Furthermore, the IMF’s approval of $600 million has paved the way for an additional inflow of $550 million from the World Bank, which is expected to be disbursed by the end of January.
Accordingly, the total combined funds now amount to $1.150 billion, and it is anticipated that these funds will be credited to the Ministry of Finance accounts by the end of this month. The purpose of these funds is to provide essential support for budgetary requirements and the establishment of the Ghana Financial Stability Fund (GFSF), both of which are aimed at fostering economic growth and macroeconomic stability.
However, given the significance of this financial development, particularly in the context of an election year, there is an increased risk of potential diversion or mismanagement of the funds by the government, driven by the desire to achieve a favorable outcome in the upcoming December election for the ruling NPP (“break the 8”). Therefore, it is imperative that the media, parliament, civil society, and opposition parties diligently monitor and ensure the transparent and appropriate utilization of the $1.150 billion funds by the government.
I will provide further updates regarding the progress of the third tranche payment of $360 million, scheduled for May 2024, as there is another condition that the government must fulfill before it can be unlocked. However, considering the delay in receiving the second tranche, which was originally planned for November 2023, the likelihood of a similar delay for the third tranche remains very high.
*Sa-ad Iddrisu, PhD*