The International Monetary Fund (IMF) Executive Board has completed the third review of Ghana’s $3 billion, 36-month Extended Credit Facility (ECF) program, which was initiated in May 2023. This milestone clears the way for an immediate disbursement of about $360 million (SDR 269.1 million), raising total disbursements under the program to approximately $1.9 billion.
The IMF noted that Ghana’s policy reforms and economic strategies under the program have delivered positive outcomes. Deputy Managing Director Bo Li highlighted the progress, stating that the country’s economic framework is meeting its objectives, with notable improvements in growth and fiscal performance.
Key Achievements:
1. Macroeconomic Recovery: Ghana’s economy has shown signs of stabilization, marked by rapid growth recovery, declining inflation (albeit slower than expected), and stronger fiscal and external positions.
2. Debt Management: The country has successfully restructured domestic debt and Eurobonds within the program’s guidelines. Negotiations with external creditors for additional debt restructuring are ongoing.
3. Fiscal Responsibility: Ghana has achieved a primary budget surplus of 0.5% of GDP, with plans to increase this to 1.5% by 2025. These fiscal goals depend on improved domestic revenue collection, careful spending prioritization, and expanding social welfare programs for vulnerable populations.
The Bank of Ghana’s prudent monetary policies have helped curb inflation and rebuild international reserves. Efforts to stabilize the financial sector include initiatives to recapitalize banks and strengthen both state-owned and private financial institutions.
Bo Li stressed the need for sustained reforms to address structural challenges, particularly in critical sectors such as energy and cocoa, and to enhance Ghana’s fiscal framework. He also emphasized the importance of maintaining fiscal discipline, especially during and after the upcoming elections, to support social programs and reinforce economic resilience.
Future Recommendations:
The IMF outlined several priorities for Ghana’s continued economic recovery:
Improve tax administration and strengthen expenditure controls.
Modernize frameworks for fiscal responsibility.
Address inefficiencies in the energy sector to mitigate financial risks.
Enhance governance and transparency to attract private investment and foster job creation.
The IMF reaffirmed its commitment to supporting Ghana’s sustainable growth efforts, emphasizing that consistent implementation of reforms is essential for achieving long-term economic stability and reducing poverty.
Source: TheDotNews