GHANA U-TURN TO THE IMF AND ASSOCIATED CONDITIONS.
Introduction
Ghana`s exit from the IMF in November 2006 came with great hope and high expectations. Many believed and thought that once Ghana had been able to come out of the IMF share, the country will be able to sustain it growth and prosperity. These hopes were however short lived, as Ghana finds itself in the same web it had escaped from. Ghana went for USD$602 million loan from the IMF barely two years later.
The reason why Ghana returns to the IMF for assistance could be explained in three ways.
Ø There was need for fiscal consolidation as a result of the global financial crisis.
Ø Ghana’s economic fundamentals in 2008 were deteriorating.
Ø Ghana’s worsening credit rating implied that the country`s ability to borrow from the international financial markets had been constrained. …show more content…
IMF always gives conditions to the beneficiary countries of its loans. IMF approved USD$602 million loan to Ghana in 2009 to support its stabilization programs for a three year period. The support of the loan forms part of the IMF Extended Credit Facility (ECF) which was created under the newly established Poverty Reduction and Growth Trust (PRGT). The ECF according to the IMF succeeds the PRGT as the funds main tool for providing medium term support to low income countries. The main goal of the program is to eliminate Ghana’s large fiscal imbalance by 2011 and put in place strengthened institutions for public financial management. The IMF loan to Ghana constitutes one of its largest arrangements in Africa in 2009.
The IMF loan to Ghana created problems in the health and educational of the Ghanaian economy, more-so it impactedted negativelyon the poor and vulnerable households.
Problems in the education
Introduction
Ghana`s exit from the IMF in November 2006 came with great hope and high expectations. Many believed and thought that once Ghana had been able to come out of the IMF share, the country will be able to sustain it growth and prosperity. These hopes were however short lived, as Ghana finds itself in the same web it had escaped from. Ghana went for USD$602 million loan from the IMF barely two years later.
The reason why Ghana returns to the IMF for assistance could be explained in three ways.
Ø There was need for fiscal consolidation as a result of the global financial crisis.
Ø Ghana’s economic fundamentals in 2008 were deteriorating.
Ø Ghana’s worsening credit rating implied that the country`s ability to borrow from the international financial markets had been constrained. …show more content…
IMF always gives conditions to the beneficiary countries of its loans. IMF approved USD$602 million loan to Ghana in 2009 to support its stabilization programs for a three year period. The support of the loan forms part of the IMF Extended Credit Facility (ECF) which was created under the newly established Poverty Reduction and Growth Trust (PRGT). The ECF according to the IMF succeeds the PRGT as the funds main tool for providing medium term support to low income countries. The main goal of the program is to eliminate Ghana’s large fiscal imbalance by 2011 and put in place strengthened institutions for public financial management. The IMF loan to Ghana constitutes one of its largest arrangements in Africa in 2009.
The IMF loan to Ghana created problems in the health and educational of the Ghanaian economy, more-so it impactedted negativelyon the poor and vulnerable households.
Problems in the education