The Executive Board of the International Monetary Fund (IMF) has completed the last review of the Extended Credit Facility (ECF) for Ghana, signifying the conclusion of the four-year support programme
The board completed the seventh and eighth reviews on
The ECF-supported programme for Ghana paved the way for a significant improvement
The IMF statement indicated that considering that the Ghanaian authorities’ resolved to tackle difficult reforms, the Executive Board also approved the authorities’ request for a waiver of the non-observance of a few programme targets.
Ghana’s three-year arrangement with the IMF was approved on April 3,
It was extended for an additional year on August 30,
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The arrangement aimed to restore debt sustainability and macroeconomic stability in the country to foster a return to high growth and job creation while protecting social spending.
Following the Executive Board’s discussion,
“In a sign of the authorities’ commitment to fiscal consolidation, the end-2018 fiscal targets were met. Sustained fiscal discipline is needed to reduce financing needs and anchor debt dynamics. As stronger revenue mobilization is critical, the submission of the tax exemption bill is
“Progress on structural reforms needs to be intensified. Plans to improve public financial management and supervision of state-owned enterprises (SOEs), the establishment of a fiscal council, and the fiscal rule are welcome. Stronger monitoring of fiscal operations, including for SOEs, will help mitigate fiscal risks.
“Debt management has improved, though reliance on foreign investors has increased Ghana’s exposure to market sentiment and exchange rate risk. Debt collateralization and revenue monetization should be limited to avoid encumbering revenues. Planned infrastructure projects should be transparently managed, be consistent with debt sustainability, and ensure value for money.
“While achieving single-digit inflation is commendable, monetary policy should remain vigilant to guard against upside risks to inflation, also stemming from exchange rate developments. Rebuilding international reserve buffers, including through careful foreign exchange liquidity management, is welcome and critical to
“The authorities deserve praise for strengthening the banking sector and for resolving nine banks. Completing the financial sector clean-up, as planned, will support the provision of adequate and affordable credit to the economy.
“The Fund congratulates the authorities for successfully completing the ECF supported programme and stands ready to support Ghana in its quest for economic prosperity.”