Gains achieved so far under the ECF programme fragile – IMF cautions Ghana

The International Monetary Fund (IMF) is cautioning the Government of Ghana against complacency under the Economic Credit Facility (ECF) programme, saying, the gains achieved so far under the programme are fragile.

In its Country Report on Ghana released on December 10, 2024, the Fund said a further reduction in the government’s fiscal deficit and financing needs requires continued efforts to boost domestic revenue and better control government spending.

At the same time, it wants the strengthening public financial management and revenue administration framework, stating, together with promptly and forcefully addressing the deep energy and cocoa sector challenges are key to underpin durable adjustment.

“While encouraging continued financial system recapitalization and tackling financial sector legacy issues remain important, further reducing inflation and rebuilding international reserves hinge on maintaining a prudently tight monetary policy stance and improving foreign exchange market operations. Finally, additional efforts to protect the vulnerable from the impact of adjustment and reforms are warranted to foster an inclusive recovery”, it pointed out in the report.

Diligent Programme Implementation Needed

The Bretton Woods institution also called for a diligent programme implementation before and after the upcoming elections, saying, it is paramount and warrants strong commitment from all stakeholders.

“Government officials have on many occasions expressed publicly a strong commitment to fiscal prudence at this critical juncture. However, the recurrent fiscal slippages during past electoral cycles and difficulties in monitoring fiscal developments in real-time due to lags in data reporting underscore the risks. There have also been delays in the reforms needed to unlock access to budget and other types of support from key development partners, in part due to parliamentary gridlock. The political debate has been dominated by the December 7, 2024, general elections”.

It added that policy statements from leading presidential contenders highlight tackling debt risks, increasing employment, and addressing high costs of living as the main priorities, consistent with the objectives of the current ECF-supported programme.