The International Monetary Fund (IMF) underscores Ghana’s imperative commitment to its bailout program to fully reap its benefits, emphasizing effective implementation of structural reforms.
This call comes following the disbursement of the $600 million second tranche to the government, underscoring the significance of adhering to the program’s requirements.
In late January, the Bank of Ghana confirmed the reception of $600 million as the second tranche, designated for budget support and currency stabilization. This disbursement constitutes part of the $1.2 billion received out of the approved $3 billion under the three-year extended credit facility granted in May 2022.
Despite progress, Ghana’s engagement with the IMF faces challenges, particularly regarding anticipated revenue shortfalls due to the proposed suspension of the Value Added Tax (VAT) on electricity. The Trades Union Congress (TUC) has vehemently opposed this move, complicating consensus-building with the IMF on fiscal adjustments.
However, Abebe Selassie, the IMF’s Director of the African Department, emphasizes the necessity of Ghana’s strict adherence to agreed-upon austerity measures. Selassie underscores that these measures are fundamental for Ghana’s economic stability and future prosperity, urging steadfastness despite obstacles.
What I can say is that going forward, it would be 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, or four years. And it is important that Ghana sticks to the course and sees the program being implemented over the next three years, he explained.
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 last year.
And of course, the official creditors are signalling 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, he further remarked.
Looking ahead, Ghana’s IMF program is scheduled for review in June 2024, with the aim of securing the third tranche amounting to approximately $360 million. This review represents a critical juncture for Ghana’s economic trajectory and its ongoing collaboration with international financial institutions in navigating prevailing economic challenges.
