The International Monetary Fund (IMF) says Ghana has made progress in strengthening its fiscal position ahead of the general elections on Saturday, December 7.
Looking ahead, the Fund said, staying the course of fiscal policy adjustment—including before and after the upcoming elections—and creating room to enhance social programs is paramount to put public finances on a sustainable path and reduce financing needs, while cushioning the vulnerable from the impact of fiscal adjustment.
The Fund directed that these should be supported by continued progress in improving tax administration, strengthening expenditure control and management of arrears, implementing an enhanced fiscal responsibility framework, and improving State-Owned Enterprises (SOEs) management.
“Promptly and forcefully addressing the challenges in the energy sector is also critical to contain fiscal risks. Building on the recent successful Eurobond exchange, the authorities should also finalize their comprehensive debt restructuring in a timely manner.
“The authorities have maintained a prudent monetary policy stance while taking decisive steps to rebuild foreign reserve buffers. Going forward, maintaining an appropriately tight monetary stance, given the upside risks to inflation, and enhancing exchange rate flexibility are of the essence,” the Fund said after announcing that the Executive Board completed the third review of Ghana’s 36-month Extended Credit Facility Arrangement on Monday, December 2, allowing for the immediate disbursement of SDR 269.1 million, about US$360 million.
Ghana’s policy and reform efforts under the IMF-supported programme have continued to deliver encouraging results, the Fund further observed.
Following acute economic and financial pressures in 2022, it said, the Fund-supported programme has provided a credible anchor for the government to adjust macroeconomic policies and launch comprehensive reforms to restore macroeconomic stability and debt sustainability, while laying the foundations for higher and more inclusive growth.
“These efforts are paying off, with growth recovering rapidly, inflation declining, although at a slower pace, and the fiscal and external positions further improving. The medium-term outlook remains favorable but subject to downside risks, including those stemming from the elections and the challenges in the energy sector,” it said.
“Ghana’s performance under the IMF-supported program has been generally satisfactory. All quantitative performance criteria and indicative targets for the third review were met. Notwithstanding some delays, good progress has also been made on the key structural reforms,” it stressed.
Source: https://3news.com
