Ghana Receives $ 185 Million From IMF After Final Fund Program Review

Company News of Thursday, March 21, 2019

Source: Myjoyonline.com

2019-03-21

The International Monetary Fund (IMF) on Wednesday completed the 7th and 8th reviews under the agreement backed by the Extended Credit Facility (ECF).

The completion of the two final exams, on March 20, 2019, will make available to Ghana a cumulative amount of about $ 185.2 million, the IMF said in a statement released Wednesday.

"Considering the authorities [resolve] To cope with the difficult reforms, the Executive Board also approved the authorities' request to waive non-compliance with some of the program's objectives, "the IMF said in its statement.

The three-year agreement with Ghana was approved on April 3, 2015 for approximately US $ 925.9 million, or 180% of the quota at the time of approval. It has been extended for an additional year on August 30, 2017 and must end on April 2, 2019.

The agreement aimed at restoring the debt sustainability and macroeconomic stability of the country to promote a return to strong growth and job creation while protecting social spending.

Following the Board's discussions, Mr. Tao Zhang, Deputy Director General and Acting President, issued the following statement:

"The authorities achieved significant macroeconomic gains during the ECF-supported program, with rising growth, single-digit inflation, fiscal consolidation, and the cleaning of the banking sector. Ongoing macroeconomic adjustment should underpin these improvements as the 2020 elections draw near.

"As a sign of the authorities' commitment to fiscal consolidation, the fiscal targets for the end of 2018 have been achieved. Sustained fiscal discipline is needed to reduce financing needs and anchor debt dynamics. As increased revenue mobilization is essential, the presentation of the tax exemption project is welcome but must be complemented by efforts to strengthen compliance with tax obligations. Budget space is needed to support priority programs, while avoiding off-budget spending.

"Progress on structural reforms needs to be stepped up. Projects aimed at improving the management of public finances and the supervision of state enterprises, the creation of a tax council and the tax rule are welcome. Enhanced monitoring of budget operations, including for state-owned enterprises, will help mitigate budget risks.

"Debt management has improved, but dependence on foreign investors has increased Ghana's exposure to market sentiment and currency risk. Debt collateralisation and income monetization must be limited to avoid incurring income. Planned infrastructure projects must be managed transparently, be compatible with debt sustainability and ensure value for money.

"Single-digit inflation is certainly commendable, but monetary policy must remain vigilant to guard against upside risks to inflation, which are also linked to exchange rate developments. The rebuilding of international reserve badets, including through prudent management of foreign currency liquidity, is welcome and is essential for building resilience to external shocks.

"The authorities deserve praise for strengthening the banking sector and for the resolution of nine banks. The completion of the cleaning of the financial sector, as planned, will provide adequate and affordable credit to the economy.

"The Fund congratulates the authorities for completing the ECF-supported program and stands ready to support Ghana in its quest for economic prosperity."