Ghana’s economic performance has been turning heads lately, with the International Monetary Fund (IMF) singing praises of its resilience and progress, performing better than was previously forecasted.
The IMF’s mission chief for Ghana, Stéphane Roudet, could not contain his excitement as he announced a major milestone: the IMF and Ghana have agreed on the next steps of their economic journey, bringing them one step closer to unlocking a hefty $360 million in support.
In a statement on Saturday 13th April Roudet said: “Performance under the IMF-supported programme has been generally strong, with most quantitative targets met. Good progress has also been made on the key structural reform milestones.
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“The authorities’ policies and reforms to restore macroeconomic stability and debt sustainability while laying the foundations for stronger and more inclusive growth are already generating positive results”, he added.
Commenting on the economy, the team indicated that economic activity in 2023 was more robust than initially envisaged, and growth projections for 2024 would accordingly be revised upward.
They lauded Ghana’s Monetary policy, indicating it had remained “appropriately tight, allowing for inflation to decline rapidly.”
The statement further indicated that spending had remained within budget limits, while the government has significantly expanded social protection programmes to help mitigate the impact of the crisis on the most vulnerable.
Additionally, Roudet noted that Ghana had achieved its goal of mobilizing non-oil revenue, while also advancing in the implementation of ambitious fiscal reforms aimed at boosting domestic revenues, improving public financial and debt management, and increasing transparency.
Roudet also indicated that “The external sector has improved significantly, with international reserve accumulation ahead of program objectives. Financial stability has been preserved, with banks posting solid profits in 2023.”
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He added that the next key step for the country was to reach an agreement with its official bilateral creditors on an MoU consistent with the terms agreed in January 2024.
The IMF staff held the meetings with the Minister for Finance, Mohammed Amin Adam, the Governor of the Bank of Ghana (BoG), Ernest Addison, and their teams, as well as representatives from various government agencies from 2-12 April 2024 to discuss progress on reforms and officials’ policy priorities under the extended credit facility.
The discussions weren’t just talk; they showcased Ghana’s impressive strides in meeting targets and pushing forward with crucial structural reforms.
The staff-level agreement now needs the approval of the IMF management executive board, however, its approval is historically succeeded by the Board approval, indicating that Ghana is highly likely to receive its next funding support, and broadly signaling to the International Community the country’s financial resilience despite the shocks resulting from the effects of COVID-19 and the Russia-Ukraine war.
The support would bring the total IMF financial support disbursed under the arrangement to about US$1.56 million since May 2023.
