COVID-19: Ghana to use IMF loan to subsidise electricity for citizens

COVID-19: Ghana to use IMF loan to subsidise electricity for citizens

Government is set to use part of the International Monetary Fund’s (IMF) $1 billion loan facility to Ghana to subsidise electricity for Ghanaians in the wake of the Coronavirus outbreak.
   
   
   
       
       
           
               
                   

Government is set to use part of the International Monetary Fund’s (IMF) $1 billion loan facility to Ghana to subsidise electricity for Ghanaians in the wake of the Coronavirus outbreak.

               
           
               
                   

This was disclosed by the Chairman of Parliament’s Finance Committee Dr Mark Assibey Yeboah following the House’s approval of the loan on Friday.

               
           
               
                   

According to him, GHc1 billion out of the said of the amount will be used to pay for the electricity subsidy.

               
           
               
                   

READ ALSO: COVID-19: 50% electricity cut will start reflecting from next month – Gov’t

               
           
               
                   

“Out of the total facility, approximately 1 billion Ghana Cedis will be used to finance electricity subsidy announced by the president whilst the remained is employed towards expenditure outlined in the 2020 budget,” he said.

               
           
               
                   

In an earlier memo to parliament, the Minister for Finance Ken Ofori Atta said the loan is part of an amount of US$50 billion the IMF is offering to help address Coronavirus impact on low income countries.

               
           
               
                   

Last week, President Akufo-Addo announced that government will absorb the electricity bills of poor citizens in a bid to alleviate the economic impact of the Coronavirus pandemic and the subsequent lockdown.

               
           
               
                   

Also, the President said 50% electricity bills will be absorbed for other consumers for the next three months.

               
           
               
                   

The subsidy of electricity is expected to cost GHc1 billion, the Energy Minister, John Peter Amewu, later revealed.

               
           
               
                   

Meanwhile, the loan is to be drawn from the IMF's Rapid Credit Facility (RCF), a product of the Bretton Woods institution that provides concessionary financial assistance with limited conditionalities to low-income countries (LICs).

               
           
               
                   

In a statement last Monday, the IMF said the money is aimed at helping address Ghana’s “fiscal and balance of payments needs” following the Coronavirus outbreak.

               
           
               
                   

It added that the IMF would continue to monitor Ghana’s situation closely and was also ready to provide policy advice and further support as needed.

Source: COVID-19: Ghana to use IMF loan to subsidise electricity for citizens

- gist culled from pulseng