The Executive Board of the International Monetary Fund (IMF) approved the release of Ghana’s second tranche of US$600 million, and as expected, the amount has reflected in the accounts of Ghana this week. The release of the second tranche brings the total disbursement to US$1.2 billion of the US$3 billion Extended Credit Facility.
The entire amount, to be disbursed over a period of three years, is mainly to support the implementation of the government’s Post-COVID-19 Programme for Economic Growth (PC-PEG).
The release of the second tranche, which was delayed as a result of the bottlenecks in securing an agreement with the Official Creditor Committee, placed the hope of the nation on tenterhooks.
Fortunately for the country, the government managed to secure that agreement last week, leading to the Fund’s endorsement of the country’s First Review of the IMF programme. The Chronicle congratulates the Ghanaian team leading the charge.
The Minister for Finance, at the press conference that announced the approval of the second tranche, described the development as a “pivotal milestone” in the country’s programme implementation.
He claimed that the agreement reached with official Creditors was a powerful vote of confidence in Ghana’s economic strategy. He added that, “Consequently this endorsement has unlocked a US$600 million disbursement from the IMF and will pave the way for an additional US$300 million disbursement from the World Bank, under the Development Policy Operation Financing by the end of February.”
The IMF Mission Chief for Ghana, Mr. Stephane Roudet, said that despite the difficult economic environment, the reforms being implemented by the government had started bearing fruit, with signs of economic stabilisation emerging.
The current developments create space for the government to breathe in the midst of the economic challenges. Data reveals that the economy has proven more resilient than it was initially envisioned.
For instance, inflation, which skyrocketed in the later part of last year has taken a nose-dive, while fiscal and external positions are also improving. The Bank of Ghana’s international reserves have been increasing and exchange rate volatility has been decreasing since the first tranche of IMF cash dropped. It is the expectation that with the second tranche hitting the account, there will be much improvement.
However, we cannot shout uhuru yet, as financial and economic experts say the road to full stabilisation is not near.
We urge the government to be cautious and responsible in the utilisation of the IMF money and other funds that may be made available from the World Bank and other partners.
Ghana is at the Breton Wood’s institution for the 17th time and we do not need a soothsayer to reveal that we are likely to return.
The government must hold on to its resolve to ensure fiscal discipline, especially before, during, and after the December 7 elections, where unbudgeted election year expenditure suffocates the economy.
It is trite knowledge that the IMF is not a father Christmas and its business thrives even more, when countries seek their support. We should not, as a country, fancy that practice.
The money they give to Ghana is the tax paid by United States citizens. For how long, 67 years since independence, will Ghana continue to depend on that? We acknowledge the global economic crisis, but if we do not act, we may find another excuse for the 18th IMF support. We must learn to adopt a home-grown solution to our challenges.
We encourage the government to take the advice of the former president in good faith and ensure that it addresses outstanding challenges through determined and steadfast policies and reform implementation.
In December, last year, we published a report in which the United Nations Resident Coordinator, Charles Abani, indicated that corruption undermines the principles of good governance and if successfully tackled, Ghana will have no business with the IMF.
He also opined, with which we agree, that if the IMF money does not have the impact it is supposed to have, then Ghana will not come out of the poverty problem it is facing.
