Ghana is being urged by the International Monetary Fund (IMF) to stay on course with its fund program in order to guarantee that the nation fully benefits from the continuing rescue package.
The Fund demands that structural reforms be implemented effectively after the release of the second tranche of $600 million, and at a time when the government is reportedly thinking about consulting with the IMF to reach an agreement on the estimated revenue shortfall resulting from the planned suspension of the electricity VAT.
However, in order for Ghana to successfully navigate its way out of the economic crisis, the IMF mandates that it follow the agreed-upon austerity measures.
“What I can say is that going forward, it would be really, really important that Ghana continues to implement the program that they have developed as envisaged. That is really critical. These programs are designed to be implemented over three, four years. And it is important that Ghana sticks to the course and sees the program being implemented over the next three years,” says Abebe Selassie, Director of the African Department at the IMF, who has been speaking about Ghana’s program in Washington, DC.
The second tranche of US$600 million for budget support and local currency stabilization was received by the Bank of Ghana in late January, increasing the total amount granted under the three-year extended credit facility in May 2022 to US$ 1.2 billion.
According to the IMF, Ghana is doing well under the program, with reforms starting to pay off and indications of economic stabilization beginning to appear.
“Ghana’s program is being implemented effectively. We just went to the board recently with the first program review following, of course, the policies that the government has been putting in place to address the huge imbalances Ghana was facing through last year. And of course, the official creditors are signaling that they will provide debt relief, consistent with what Ghana needs. So, we just went to the Board a couple of weeks ago. We look forward to continuing to support Ghana, consistent with program implementation,” Abebe Selassie added.
The third tranche of Ghana’s IMF program, worth about US$ 360 million, is expected to be reviewed in June 2024.
