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The International Monetary Fund announced on Tuesday that it and Ghana had reached a staff-level agreement on the fourth review of its $3 billion loan program.
If approved by the Fund’s executive board, the deal will liberate $370 million.
The producer of cocoa, oil, and gold in West Africa is recuperating from the worst economic downturn in decades, which compelled the government to restructure its debt.
According to the IMF’s statement, Ghana’s overall performance under the program had significantly declined by the end of 2024; however, the government has subsequently taken action to rectify policy and reform shortcomings.
“The new authorities have taken bold measures to address policy slippages and ensure the program objectives remain within reach,” referring to the new administration of President John Dramani Mahama, which was elected in January, the IMF stated that the shortfalls included a buildup of bills, an inflation rate that was higher than the target, and a delay in some reforms and policy measures in a number of sectors.
“On the fiscal front, the government has launched an audit of the payables to firm up the size and nature of the slippages,” it said.
According to the IMF, the primary budget showed a deficit of 3.25% of GDP, while the target was a surplus of 0.5% of GDP. According to the IMF, the government has since approved a budget for this year that aims for a primary surplus of 1.5% of GDP.
Monetary authorities have upped the main interest rate in try to cajole inflation downwards, the IMF stated, and the central bank is revising its liquidity management procedures.
“The ensuing tightening in the monetary policy stance, together with the ongoing fiscal consolidation, is expected to bring inflation down,” it stated.
During campaigns, Mahama pledged to renegotiate the terms of the IMF program, but his government has since broken that promise.
“Renegotiating pre-supposes that you don’t believe in the parameters of the programme… that is not the position of the government,” Finance Minister Cassiel Ato Forson told a joint press conference with the IMF in Accra.
Source: Ghanatodayonline.com
