The International Monetary Fund (IMF) has expressed satisfaction with Ghana’s Economic performance under the IMF-supported program, as it reaches staff-level agreement on the second review of Ghana’s economic program under the Extended Credit Facility (ECF) arrangement.
Addressing the media at a joint news conference with the Bank of Ghana (BoG) and the Ministry of Finance (MoF) last Saturday, April 13, 2024 the Mission Chief for Ghana, Mr. Stéphane Roudet, announced that “IMF staff and the Ghanaian authorities have reached a staff-level agreement on the second review of Ghana’s economic program under the Extended Credit Facility arrangement.”
According to him, Ghana would have access to about US$360 million in financing, once the review was further approved by IMF Management and formally completed by the IMF Executive Board.
To ensure timely completion of the review, the IMF said Ghana and its official bilateral creditors need to reach agreement on a Memorandum of Understanding (MoU) for a debt treatment, consistent with the agreement in principle reached in January 2024.
Mr. Roudet further stated that “Ghana’s performance under the IMF-supported program has been generally strong, with most quantitative targets met. Good progress has also been made on the key structural reform milestones.
“The authorities’ policies and reforms to restore macro-economic stability and debt sustainability while laying the foundations for stronger and more inclusive growth are already generating positive results”
He added that Ghana has met its non-oil revenue mobilisation target, while making progress in implementing ambitious structural fiscal reforms to bolster domestic revenues, strengthen public financial and debt management, and enhance transparency.
Ministry of Finance
The Minister of Finance, Dr. Mohammed Anim Adam, who also addressed the gathering, admitted that Ghana’s medium-term macro-economic outlook and prospects continue to be positive and promising.
Dr. Anim Adam said this was because of government’s decision to enforce its commitment to implementing comprehensive structural reforms to support growth, improve the PFM system, improve revenue mobilisation, and support sound monetary and exchange policy.
“We have also put in place sufficient control and monitoring mechanisms to ensure key targets under the IMF-supported programme are met, even though 2024 is an election year,” he added.
The Minister explained that the Second Review was based on key performance indicators, including six (6) Quantitative Performance Criteria, three (3) Indicative Targets and one (1) Structural Benchmarks that was due at the end of December 2023 and 4 Structural Benchmarks due at the end of March 2024 since the program is also forward looking.
The Fund, according to him, had so far presented a favourable assessment of Ghana’s performance against these targets, “which has translated into the Staff Level Agreement (SLA)
He assured that “we remain committed to the effective implementation of the IMF programme and ensuring sustained growth and stability of the Ghanaian economy. With the support of all stakeholders, we are confident in our ability to achieve our objectives and build a stronger and more resilient nation.”
The Bank of Ghana
The Governor of the Bank of Ghana, Dr. Ernest Ato Addison, who also expressed satisfaction in Ghana’s economic performance emphasized the importance of collaboration with the IMF, culminating in a Staff-Level Agreement that is anticipated to lead to Management and Executive Board approvals for the release of additional IMF support.
He noted the successful completion of the first review of the Extended Credit Facility (ECF) program and the ongoing progress in the second review, showcased Ghana’s dedication to policy implementation despite challenges.
“With substantial progress in these measures, we are beginning to reap substantial macroeconomic dividends. Inflation has dropped significantly from a peak of 54 percent at end of 2022 to 23 percent in 2023. The exchange rate remained relatively stable throughout last year, supported by tighter monetary policy and stronger foreign exchange reserves. Economic growth surprised on the upside”, the governor indicated.
While acknowledging some slowdown in disinflation in the first quarter of 2024 due to various factors, the Governor expressed optimism for a resumption of the disinflation process in the second quarter. He maintained an expectation of end-year inflation within the range of 15+/- 2%.
Concluding his remarks, the Governor emphasised the need for steadfast program implementation, fiscal discipline, tight monetary policies and structural reforms to sustain progress.
He highlighted the government and Central Bank’s commitment to successfully implementing the IMF-supported program, even in an election year, to ensure continued macroeconomic stability and a prompt return to capital markets.
