After recent improvement in proving its debt sustainability status following financing assurances from its biggest external creditors including the Paris Club and China, all is now set for the Executive Board of the International Monetary Fund (IMF) to initiate talks on a possible approval of Ghana’s bailout request.
Given that Ghana has now completed all prerequisite activities for the programme, the IMF Board will undertake this exercise and possibly ensure that the country receives its first portion of its 3 billion dollar request while also concluding matters on the country’s Extended Credit Facility (ECF) arrangement.
According to reports, the IMF is expected to engage journalists in a virtual press conference on Thursday, May 18, 2023, to discuss the outcome of the board meeting concerning Ghana’s ECF request.
Finance Minister Ken Ofori-Atta is expected to join the meeting away from the country as he is reportedly in the USA for other engagements. Also present will be the Governor of the Bank of Ghana who will be joining from Accra.
The Ghana government’s resort to pursue an IMF programme has over the years put various institutions and individuals under intense pressure as it sought to embark on a domestic restructuring exercise, a requirement to initiate a Staff-Level agreement with the IMF. Funds of Bondholders had to be used in the process although owners of these funds had severely expressed their disapproval.
Given also that the value of the Cedi had reduced against the dollar quite significantly, things only got worse as the situation informed a persistent hike in inflation.
With a Staff- level discussion around the corner, the country might soon be able to get on track with a speedy recovery.
Meanwhile, some experts are warning ahead of the possible approval of the country’s IMF programme that the programme itself is not the solution to the current economic downturn.
An Economist, Professor Godfred Bokpin says the government should not jubilate over another loan programme but it should rather get working. According to him, the programme could be detrimental to local businesses.
“In as much as a board approval represents good news we need to be a bit cautious. This is because, when you open the programme it will be work. The first release is a statement of intent, the subsequent instalment will be based on performance. So I’ll urge Ghanaians to wait and see what is in the programme itself. What are the structural benchmarks? What are the fiscal reforms?
“Don’t forget that the Board approval is good news, there are targets that we have to meet every six months of the programme review. Part of the target may include our tax to GDP ratio of 18% the strategy of increasing tax revenue could impact negatively businesses. If we don’t adopt optimal tax handles. So if you ask me, it is time to roll our sleeves and get to work. It is not time to pop the champagne,” he said on JoyNews’ PM Express on Tuesday.
To ensure transparency in the rollout of the programme, it is reported that the full details of the economic recovery measure will be published for all to see once it is approved by the IMF.
This was disclosed by the Minister of State at the Finance Ministry, Dr Mohamend Amin Adam.
“As a result of this, the government has instructed the IMF to publish all the document once the approval has been given. The documents will be out there for the public to continue to scrutinise and to help monitor. It is important because we are suppose to implement a number of measures and to the extent that the public must know what these measures are.”
“Through this, they [Ghanaians] will be able to ask relevant questions as to how we are performing. Public accountability will continue to be a feature of the Ghanaian politics. We have a strong parliament who are not afraid to ask relevant questions and so we want to be as transparent as possible and that is the commitment the president [Akufo-Addo] has made,” Dr. Amin Adam said.