Ghana has achieved targets and improved under bailout programme – IMF

The International Monetary Fund (IMF) has revealed that Ghana’s performance under the $3billion support programme has been strong.

The IMF added that all quantitative performance criteria for the first review and almost all indicative targets and structural benchmarks were met.

This follows the IMF Executive Board conclusion of the 2023 Article IV Consultation with Ghana and First Review under the Extended Credit Facility Arrangement on January 19, 2024.

The IMF said in a statement that consistent with the authorities’ commitments under the fund-supported programme, Ghana is on track to lower the fiscal primary deficit on a commitment basis by about 4 percentage points of GDP in 2023.

“Spending has remained within program limits. To help mitigate the impact of the crisis on the most vulnerable population, the authorities [Ministry of Finance, Bank of Ghana] have significantly expanded social protection programmes. On the revenue side, Ghana has met its non-oil revenue mobilization target,” the statement pointed out.

Furthermore, the IMF said Ghanaian authorities were also making good progress on their debt restructuring strategy, noting, “Their domestic debt restructuring was completed over the summer. On January 12, 2024, the authorities reached an agreement with the Official Creditor Committee (OCC) under the G20’s Common Framework on a debt treatment that is in line with Fund program parameters. This agreement provided the financing assurances necessary for the Executive Board review to be completed”.

Again, the IMF highlighted that the ambitious structural fiscal reforms by government were bolstering domestic revenues, improving spending efficiency, strengthening public financial and debt management, preserving financial sector stability, enhancing governance and transparency, and helping create an environment more conducive to private sector investment.

“The authorities’ reform efforts are bearing fruit, and signs of economic stabilization are emerging. Growth in 2023 has proven resilient, inflation has declined, and the fiscal and external positions have improved,” it added.

On debt restructuring generating positive results, the Deputy Managing Director and Acting Chair Bo Li issued the following statement saying, “Ghana’s economic performance has been marked by significant volatility over the years. Most recently, severe external shocks compounded pre-existing fiscal and debt vulnerabilities, leading to acute economic and financial pressures in 2022. The authorities’ efforts to reorient macroeconomic policies, restructure debt, and initiate wide-ranging reforms are already generating positive results, with growth more resilient than initially envisaged, inflation declining, the fiscal and external positions improving, and international reserves increasing”.

“Fully and durably restoring macroeconomic stability and debt sustainability and fostering higher and more inclusive growth requires steadfast policy and reform implementation. The government’s plans to further reduce deficits by mobilizing additional domestic revenue streamlining expenditure and finalising its comprehensive debt restructuring are critical to underpin debt sustainability and ease financing constraints. Continued efforts to protect the vulnerable and to create space for higher social and development spending are also key. Reforms to improve tax administration, strengthen expenditure control and management of arrears, enhance fiscal rules and institutions, and improve SOEs management are needed to ensure lasting adjustment”.