After a week of intense negotiations with the Government of Ghana, officials of the International Monetary Fund, IMF, have concluded their visit to Ghana.
The visit which formed part of the first stage of negotiations with government, was part of efforts to assess the current economic situation and discuss the broad lines of the government’s Enhanced Domestic Program that could be supported by an IMF lending arrangement.
In a statement issued by the IMF, the Fund noted that during the first part of discussions on the economic support programme for Ghana, it focused on helping the government of Ghana to improve its fiscal balances in a sustainable way while protecting the vulnerable and poor.
“The discussions focused on improving fiscal balances in a sustainable way while protecting the vulnerable and poor; ensuring credibility of the monetary policy and exchange rate regimes; preserving financial sector stability; and designing reforms to enhance growth, create jobs, and strengthen governance,” it said.
The IMF team held initial discussions on a comprehensive reform package to restore macroeconomic stability and anchor debt sustainability.
The team also made progress in assessing the economic situation and identifying policy priorities in the near term.
The fund however noted that Ghana is facing a challenging economic and social situation amid an increasingly difficult global environment. The fiscal and debt situation has severely worsened following the COVID-19 pandemic. At the same time, investors’ concerns have triggered credit rating downgrades, capital outflows, loss of external market access, and rising domestic borrowing costs.
In addition, the global economic shock caused by the war in Ukraine is hitting Ghana at a time when the country is still recovering from the Covid-19 pandemic shock and with limited room for maneuver.
These adverse developments, the Fund noted, have contributed to slowing economic growth, accumulation of unpaid bills, a large exchange rate depreciation, and a surge in inflation.
The Fund reiterated its commitment to support Ghana as the country struggles to recover from the impact of the COVID-19 pandemic and the Russia-Ukraine war.
“IMF staff will continue to monitor the economic and social situation closely and engage in the coming weeks with the authorities on the formulation of their Enhanced Domestic Program that could be supported by an IMF arrangement and with broad stakeholders’ consultation. We reaffirm our commitment to support Ghana at this difficult time, consistent with the IMF’s policies,” it said.
The IMF team met with H.E. Vice President Bawumia, Finance Minister Ofori-Atta, and Governor Addison of the Bank of Ghana, the Parliament’s Finance Committee, civil society organizations, and development partners, including UNICEF and the World Bank to engage on social spending.