The International Monetary Fund (IMF) has commended Ghana for being “open and constructive” during the negotiation for a $3 billion bailout. It is a three-year External Credit Facility to support the economic policies and reforms of the country.
The Fund expressed their gratitude to the government of Ghana, Parliament and other stakeholders in a statement it issued to announce the staff-level agreement.
The statement issued by the Mission Chief of Ghana, Mr. Stéphane Roudet, climaxes the visit to Accra from December 1–13, 2022 to discuss with the Ghanaian authorities about IMF support for their policy and reform plans.
The IMF said the economic program aims to restore macroeconomic stability and debt sustainability while laying the foundation for stronger and more inclusive growth.
“The staff-level agreement is subject to IMF management and executive board approval and receipt of the necessary financing assurances by Ghana’s partners and creditors,” the Mission Chief for Ghana remarked.
The Ghanaian authorities, as the Fund has stated, have committed to a wide-ranging economic reform program that builds on the government’s Post-COVID-19 Program for Economic Growth (PC-PEG) and tackles the deep challenges facing the country.
There are also key reforms aimed at ensuring the sustainability of public finances while protecting the vulnerable.
The government’s fiscal strategy, the IMF has said, relies on front loaded measures to increase domestic resource mobilisation and streamline expenditure.
In addition, the government of Ghana has committed to strengthening social safety nets, including reinforcing the existing targeted cash-transfer programme for vulnerable households and improving the coverage and efficiency of social spending.
Though the Mission Chief for Ghana, answering a question at a joint press conference yesterday, could not give specific timelines, he was sure the money would hit Ghana’s account immediately after the IMF board approves the programme.
However, he said that Ghana’s external partners and creditors would have to assure the IMF that there would be enough funding for the programme.
CURRENCY
At a joint press conference yesterday, held by the IMF and the Ministry of Finance to announce the staff-level agreement, the Minister for Finance, Ken Ofori-Atta, disclosed that the local currency was appreciating against the foreign ones, following the announcement of the agreement.
According to figures provided by the Bank of Ghana, the cedi moved from GHC13 to GHC11 against the dollar as of midday Tuesday.
This paper observed the constant positive decline since last year, and economic experts have predicted it would go down further.
STABILITY
The Minister for Finance, addressing journalists, was optimistic that the agreement, when finally approved by the IMF Board, will help restore macroeconomic stability, tackle inflation and strengthen the local currency.
“Truly, the eventual conclusion of the program will assist us in our efforts to restore stability, tackle inflation, and strengthen our currency,” he inspired hope.
Ghana’s inflation rate climbed more than expected in October, raising pressure on the central bank to continue increasing borrowing costs that are already at a more than five-year high.
Annual inflation quickened to 40.4% compared with 37.2% a month prior, government Statistician, Samuel Kobina Annim said.
In his address, Mr. Ofori-Atta also called on Ghanaians and relevant stakeholders to come on board and support the programme to ensure its success.
“That is why the various ingredients of the program should be supported by all Ghanaians and all stakeholders.”
RESPONSE TO TUC
Responding to the agitations from the Trades Union Congress (TUC) with regards to the debt restructuring measures that have come with it, a freeze on public employment and others, the Finance Minister said he understands the TUC because of the current shock facing the country.
However, he stated that the government had been able to do a lot in the last five months, especially to help bring the country back on track.
He assured that the social intervention programme initiated by the government, including the free senior high school would be protected and enhanced, contrary to fears that the IMF programme may affect it negatively.
