Dr Ernest Addison, Governor of the Bank of Ghana (BoG), has appealed to the International Monetary Fund (IMF) to maintain its zero interest rate loans for Ghana and other low-income countries.
The Fund through its Poverty Reduction and Growth Trust (PRGT) provides concessional financing (currently at zero interest rates) to low-income countries (LICs).
“We underline the necessity for the upcoming comprehensive review of LICs facilities to maintain the PRGT’s concessionality and promote higher access to reverse erosion amplified by the global inflationary episode,” Dr Addison said.
Keeping the concessional financing, the Central Bank Governor said would be helpful in complementing monetary policies to further tame the inflationary pressures and support economic recovery and resilience in low-income countries.
He said this during 2024 African Consultative Group (ACG) meeting with Ms Kristalina Georgieva, Managing Director, IMF, at the ongoing IMF/World Bank Group Spring Meetings in Washington, US.
The discussion focused on ways to bolster Africa’s financing through the overlapping crises and beyond.
Dr Addison also called for a replenishing of the Catastrophe Containment and Relief (CCRT) resources envelope to offer grant support to most vulnerable members in a shock-prone world.
He also reiterated the request for further enhancements to the G20 Common Framework while leveraging the Global Sovereign Debt Roundtable (GSDR) to promote rapid, transparent, and equitable resolution of debt as well as facilitate debt cancellation for the most vulnerable members.
“The review of the Fund’s internal debt policies is welcome, but we stress the need to ensure that the changes are impactful and achieve their intended purpose,” the Central Bank Governor noted.
He also called for stronger coordination of the IMF’s LICs facilities review with the World Bank’s IDA21 replenishment efforts to support LICs in a holistic manner.
On the part of African governments, Dr Addison encouraged an increase domestic financing to complement monetary policy measures amid economic recovery and resilience on the continent.
That, he said had become necessary as African countries continued to face complex challenges against the backdrop of successive shocks, manifesting in a subdued post-pandemic recovery.
He stated that those shocks had elevated debt distress, with a persistent funding squeeze, which had also amplified income divergences and undermined the achievement of sustainable and inclusive growth.
“Our domestic adjustment policy efforts without adequate financing can only yield limited results, in the context of the complex domestic and external environment,” Dr Addison said.
