Ghana is now a rising star in Africa – MFIs | Economy

The International Monetary Fund (IMF) said its bailout program helped Ghana regain its rising star status in Africa.

In its latest badysis of the Ghanaian economy, the IMF has seriously charged Mr. Mahama during his tenure. Ghana has opted for the rescue plan for blatant mismanagement of the Ghanaian economy.

Analysis

According to the IMF, "Ghana has been hailed as one of the success stories of sub-Saharan Africa."

He added that "Ghana (Ghana) was the first to emancipate from colonial rule in 1957. It built a stable democracy in the 1990s, overcoming decades of political upheaval. A thriving economy fueled by exports of cocoa, gold and, more recently, oil has reduced the poverty rate from 53% in 1991 to 21% in 2012. "

But in 2015, the IMF regretted, Ghana's economy was in trouble, hampered by widening current and fiscal account deficits, rampant inflation and a depreciating currency.

He said that "credit has dried up with the rise in interest rates and the proliferation of bad loans banks. Uncontrollable government spending, largely to pay the salaries of a large public service, was the source of Ghana's hardship. "

"A review of badet quality revealed significant undercapitalization. Some banks have been recapitalized and the Bank of Ghana has used its newly strengthened power to eliminate insolvent lenders. The central bank has developed regulations to ensure that banks comply with sound underwriting and credit standards. It also reimbursed depositors of insolvent microfinance institutions. "

Program

In early 2015, Ghana applied for a $ 918 million loan from the IMF to help stabilize the economy.

IMF advisers, in collaboration with the Ghanaian government, have developed a three-pronged program that includes: restoring debt sustainability, strengthening monetary policy, cleaning up the banking system.

Under this program, as part of the restoration of debt sustainability, the Government of Ghana was forced to limit increases in hiring and salaries and eliminate subsidies to public services and petroleum products.

To generate revenue, he put an end to tax evasion and streamlined exemptions.

New sources of revenue included a tax on luxury cars and higher taxes on high earners. To clean up Ghana's finances, the new law on public financial management called for improved accounting standards, procedures and technologies.

The Ghanaian authorities have decided to phase out the financing of the budget deficit by the central bank, a major source of inflation, and to strengthen the inflation targeting regime.

The result

According to the IMF, "Ghana's economy is recovering. Trade and budget deficits are shrinking. "

The pace of economic growth is expected to increase from 2.2% in 2015 to 8.8% in 2019.

Again, the IMF said the inflation rate should fall from 8% to 8%.

"The reduction of unnecessary spending has given way to indispensable social services, such as free secondary education."

He added that "for Ghana's 28 million people, this translates into higher incomes, better job prospects and greater purchasing power. Nevertheless, Ghana remains largely dependent on external financing, which exposes it to fluctuations in investor confidence. Maintaining fiscal discipline will also be a challenge. "