Ghana Asks World Bank, IMF for Help as Virus Seen to Hit Revenue

(Bloomberg) --

Ghana is requesting support from the World Bank and the International Monetary Fund to mitigate against the economic impact of the global outbreak of coronavirus.

A preliminary review shows that the West African nation’s income from oil, tourism, aviation and trade will miss initial forecasts, Finance Minister Ken Ofori-Atta told lawmakers. While Ghana anticipates a financing gap as a result of the disruption, its $3-billion Eurobond issuance will provide a buffer for the government’s finances, according to a copy of Ofori-Atta’s address to parliament.

Earlier this month, the World Bank announced a $12-billion package to help poorer countries confront the disease’s health and economic effects, while the IMF announced a rapid credit-facility of $50 billion for similar purposes.

“Measures are being put in place to close a possible financing gap in the 2020 budget,” Ofori-Atta said. These may also include withdrawals from the government’s stabilization fund, which is financed from oil revenue, he said. The fund had $333 million available at the end of September, according to the finance ministry.

Ghana set its 2020 budget deficit at 4.7% of gross domestic product and is yet to announce a revision of this forecast. Apart from oil that has been hit by a downturn in demand and a price-war between Saudi-Arabia and Russia, Ghana’s other main commodity exports, gold and cocoa, have also erased gains recorded in January and February.

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