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 ongoing bailout package.
Following the release of the second tranche of $600 million and at a time when the government is reportedly considering engaging with the IMF to reach an agreement on the anticipated revenue shortfall over the planned suspension of the VAT on electricity, the Fund demands the effective implementation of structural reforms.
However, the IMF maintains that in order for Ghana to navigate its way out of the economic crisis, it must follow the agreed-upon austerity measures.
All I can say is that it would be crucial moving forward for Ghana to keep carrying out the program they have designed according to plan. That is extremely important. The intended duration of these programs is three or four years. Speaking about Ghana’s program in Washington, DC, Abebe Selassie, Director of the IMF’s African Department, says that it is crucial that Ghana stays on course and sees the program through to completion over the next three years.
The second tranche of US$600 million for budget support and local currency stabilization was received by the Bank of Ghana in late January, bringing the total amount approved 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.
“The Ghanaian program is being executed well. As a result of the policies the government has been implementing to address the severe imbalances Ghana was experiencing last year, we just presented the board with the first program review. Naturally, the official creditors are indicating that they will offer debt relief in accordance with Ghana’s requirements. We recently visited the board a few weeks ago. In keeping with the program’s execution, we look forward to supporting Ghana in the future,” Abebe Selassie continued.
Ghana’s third tranche, worth about US$360 million, is up for review by the IMF in June 2024.
