Ghana has passed the International Monetary Fund (IMF)’s third review test under the Extended Credit Facility (ECF) program.
According to the IMF Ghana’s performance was satisfactory.
Head of the IMF mission to Ghana Joel Toujas-Bernaté said ‘the implementation of the program remains satisfactory. We have seen most of the targets and performance criteria in the end of 2015 being achieved with just done small exceptions. The economic performance has been slightly better than expected’.
[contextly_sidebar id=”esjKTijh3ASuuPjUHln3lBFnnrhFstaS”]The IMF which begun the review two weeks ago said most of the targets under review in the period up to December 2015, were met, with the exceptions of small deviations in the wage bill and net domestic assets of Bank of Ghana (BOG).
‘Economic growth for 2015 is estimated at about four percent, slightly above what was our earlier prediction for last year and indeed the debt to GDP ratio has been high and remains high.
The debt to GDP ratio last year increased slightly further to about 72% of GDP but the base of data accumulation has slowed down. What is very important is looking out for this year because the objective is to achieve a primary surplus for the fiscal deficit, for the first time in almost a decade, this will allow the debt to GDP ratio to decline in 2016 and then we would see much more … dynamic in terms of a decline in trend in the debt to GDP ratio which should cover several years, bring this pressure down to a more sustainable level which would also put Ghana back into the group of countries which are considered as having not high risk of debt risk.’ He said.
Ghana last year entered the ECF program with the IMF which will see the fund dish out 940 million dollars in a number of tranches.
Two tranches have already been disbursed.
Earlier some analysts had expressed reservations about Ghana’s performance.
The CEO of Dalex Finance, Ken Thompson for example, told Citi Business News, current economic indicators like inflationary trends, increased borrowing and the monetary policy rate does not support the country’s ability to meet the IMF review targets.
“We may not meet all the targets set but I think overall, we should pass the assessment because both parties realize the implications of not passing the assessment. If we don’t pass, it will not be good for the IMF and it will also not be good for the government as well,” he stated. The Dalex Finance boss further intimated, “We may miss some targets but I don’t think that will result in a failure. I am sure the government will broadly be in line. What I am hoping is that the IMF will give the assessment in English so that everybody can understand what the issues are and support the government to do better next time.”
Speaking during a press briefing after the team concluded its third review head of the IMF mission to Ghana Joel Toujas-Bernaté said Ghana must continue its fiscal consolidation notwithstanding the headwinds from low commodity prices.
The IMF team, Citi Business News understands will continue to support the Ghanaian authorities as they finalize work in the coming weeks in a few areas, including on the new PFM law, the amended BOG Act and the strategy for addressing the financial situation of State Owned Enterprises (SOE)s.
Meanwhile the IMF Executive Board is expected to consider the review during the summer after finalization of the required documentation.
By: Norvan Acquah – Hayford/citibusinessnews.com/Ghana