Ghana receives $191m boost to restore economic stability

3 May 18

The International Monetary Fund has approved a $191m loan for Ghana to it restore debt sustainability and protect social spending in the country.

Tao Zhang, the IMF’s acting chair and deputy managing director, announced the IMF executive board had discussed whether the organisation’s programme in Ghana is ‘on track’.  

The IMF has had a programme in the African country since its economic crisis in 2015, through which it aims restore macroeconomic stability to foster growth and create more jobs.

Zhang said: “Growth has rebounded [in Ghana], the fiscal deficit has declined, leading to a primary surplus for the first time in fifteen years, the external position has strengthened, generating a build-up of external buffers, and key steps have been taken to address fragilities in the financial sector. Reforms should continue to entrench these hard-won gains.”

Ghana had previous been a relatively prosperous African country. The IMF started its three-year programme in 2015 with a $920 million loan - which comes with specific terms - from its extended credit facility from the IMF in April 2015.

Zhang added the government should continue to implement its fiscal consolidation programme, with focus on boosting tax collection.

“Gains from fiscal consolidation and macroeconomic stability need to be underpinned by continued efforts to implement wide-ranging and ambitious reforms,” Zhang said.

“The public financial management regulations recently submitted to Parliament should strengthen budget formulation and execution.”

He added: “Stronger oversight over the management of public finances should continue to be pursued, also in line with recommendations from the audit of unpaid bills.”

The IMF’s extended credit facility s low-income countries struggling to ‘make ends meet’. Under the programme, reviews are made to ensure the country is adapting economic developments before any disbursement - or loan with specific terms - is made.

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