The International Monetary Fund (IMF) staff and the government of Ghana have reached a Staff-Level Agreement on economic policies and reforms, which will be supported by a new three-year arrangement of approximately $3 billion under the Extended Credit Facility (ECF).
According to a fund statement, the government’s strong reform program influenced the decision to restore macroeconomic stability and debt sustainability while protecting the vulnerable, preserving financial stability, and laying the groundwork for a solid and inclusive recovery.
The staff-level agreement, however, is subject to IMF Management and Executive Board approval, as well as Ghana’s partners and creditors providing the necessary financing assurances.
According to the statement, the government has launched a comprehensive debt operation to restore public debt sustainability. However, the Fund stated that sufficient assurances and progress would be required before the proposed Fund-supported program can be presented to the IMF Executive Board for approval.
“The Ghanaian authorities have committed to a wide-ranging economic reform program, which builds on the government’s Post-COVID-19 Programme for Economic Growth (PC-PEG) and tackles the deep challenges facing the country.Key reforms aim to ensure the sustainability of public finances while protecting the vulnerable. The fiscal strategy relies on frontloaded measures to increase domestic resource mobilisation and streamline expenditure. In addition, the authorities have committed to strengthening social safety nets, including reinforcing the existing targeted cash-transfer program for vulnerable households and improving the coverage and efficiency of social spending”, IMF explained
The statement also stated that structural reforms will be implemented to support the fiscal strategy and ensure long-term consolidation. These include developing a medium-term plan to generate additional revenue and advancing reforms to bolster tax compliance.
The IMF staff met with Vice President Dr Bawumia, Finance Minister Ken Ofori-Atta, Bank of Ghana Governor Dr Ernest Addison, and representatives from other government agencies.