The International Monetary Fund (IMF) Mission Chief for Ghana, Stephane Roudet has disclosed that government must secure the required financing assurance from external bi-lateral creditors before the IMF board can approve the next tranche of funds for the country.
Mr. Roudet disclosed this on a yet-to-be aired PM Express Business Edition with host, George Wiafe on Thursday October 12, 2023 on Joy News.
He spoke after the IMF Staff completed its Mission Visit and Article IV Consultation visit to Ghana from September 25 to October 6, 2023.
“Just like we got the financing assurance before Ghana secured the IMF programme, this financing agreement from the external creditors is needed before the IMF board approves the First programme review” he said.
He explained that financing assurance is a safeguard measure for the IMF.
“For us to be able to present Ghana’s Report to the Board in November 2023, we need this financing assurance”, he stressed.
Touching on the form of financial assurance required, he pointed out that the IMF will be part of the meetings and will assess the level of commitment of the creditors.
Per the rules, the staff-level agreement is subject to IMF Management approval and Executive Board.
Ghana will receive $600 million after an approval from the Board.
IMF Programme Review and Article IV Consultation
The IMF Team was in Accra to discuss progress on reforms and the government’s policy priorities in the context of the first review of Ghana’s three-year program under the Extended Credit Facility.
The arrangement was approved by the IMF Executive Board for a total amount of SDR 2.242 billion (US$ 3 billion) on May 17, 2023. The team also conducted the 2023 Article IV consultation.
IMF on Ghana’s economy and projections
The IMF has come under some criticism after it revealed that it has seen Ghana’s economy show signs of stability.
Reacting to this, Mr. Roudet the IMF stands by its assessment of the economy which shows some stability.
“Think about the economic and financial situation in Ghana last year, when you had a very high inflation rate of 54 percent in December. You had a very high fiscal deficit, and an external position where international reserves was going down”.
“So when we talk about signs of stability, that is what we are talking about” he added.
He argued that a care examination of the fiscal position shows that the economy will grow faster than the 1.5 percent prediction made by the IMF for this year.
Is Ghana’s IMF Programme moving too fast?
Mr. Roudet explained that some decisions were taken to fast track Ghana’s recovery, contrary to concerns by some analysts that the path chosen by the IMF could be counterproductive.
He stated that Ghana is also making some significant progress to livelihood of its citizens.
“The IMF is working hard to even fast track the process going forward. This is what we want to see”.
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