Parliament is expecting a successful exit from the International Monetary Fund’s (IMF’s) extended credit facility program which was entered into in 2015, should lead to better ratings for Ghana on the international market as well as cheaper cost of credit.
This was made known by the Chairman of the Finance Committee of Parliament, Dr. Mark Assibey-Yeboah, following a meeting between a team from the IMF and parliament’s Finance Committee, for the 7th and 8th review of Ghana’s program with the Fund.
Ghana’s three year arrangement (extended by a year) for US$918 million which was approved on April 3, 2015, aims to restore debt sustainability and macroeconomic stability in the country to foster a return to high growth and job creation, while protecting social spending.
The government has given assurances that the economy will remain resilient and robust even after the International Monetary Fund (IMF) program is over.
Speaking exclusively Citi Business News after the final meeting, Chairman of the Finance Committee of Parliament Dr. Assibey-Yeboah said he is confident Ghana will successfully exit the extended credit facility program after April 3rd.
“Clearly Ghana is exiting the program after April third as already agreed upon. You’ll recall that we went to the fund for policy credibility. So if you exit they have to sign you off. We want a clean bill of health, so the IMF team will go to the board at the end of March after which the board will decide as to whether or not Ghana has successfully completed the program.”
Throughout the various reviews, Directors of the IMF have commended Ghana on a number of things, welcoming the deceleration in inflation as well as the progress made in the strengthening the banking system, in particular through the approval of timebound recapitalization plans for undercapitalized banks.
On the things that need to be worked on, the Directors emphasized the need to tackle energy sector inefficiencies, particularly improving the management of the state‑owned enterprises (SOEs). They also advised that ongoing debt restructuring efforts are helpful but are no substitute to stemming the SOEs’ financial losses.
While highlighting the progress Ghana has made under the program, Dr. Assibey-Yeboah went on to share some of the benefits of successfully exiting the program for Ghana.
“If we successfully exit the program, then we are found to be credit worthy, it affects our ratings, it affects the cost of borrowing and we are able to tap into other markets because the IMF says these people are credible and they are credit worthy.”
He finally added that apart from the disbursement of the final tranche of about $118 million from the IMF, Ghana was looking at receiving other disbursements from bodies like the World Bank as a result of successfully exiting the program.
By: Bobbie Osei/citibusinessnews.com/Ghana