Get financing assurances from creditors, partners before Board approval – IMF to Ghana

The International Monetary Fund (IMF) has indicated that it is necessary for Ghana to secure financing assurances from its partners and creditors before the country can present its programme request to the Executive Board for approval.

The Fund was responding to a question at a news conference in Washington DC, U.S.A on the status of Ghana’s programme, following a recent statement by President Akufo-Addo that Ghana is working to submit its programme to the board by end March 2023 for approval.

The Director of Communications at the IMF, Julie Kozack noted that “Financing assurances from partners and creditors are necessary for presenting the programme request to the IMF’s Executive Board for approval”.

She stated that while the IMF is engaging the Ghanaian Authorities on the progress made on its request, the Fund is also seeking the assurances from Ghana’s partners.

“We’re calling on bilateral creditors to support Ghana’s effort to restore debt sustainability, form an official creditor committee, and deliver the necessary financing assurances as soon as possible”, she stressed.

Status of Ghana’s Programme

Government has indicated that it is working to present its economic programme by March ending 2023. 

The government is yet to meet all the pre-conditions needed before the programme can commenced.

As part of the requirements, government is expected to pass a law that will ensure zero financing from the Bank of Ghana.

Meeting the March end deadline

There are reports that Ghana is likely not to get its programme approved by the end of March 2023.

This is due to the fact that the processes needed to get the approval require a submission of reports to the Africa Office of the IMF before it goes to Washington DC.

Some observers are hopeful Ghana may get its programme approved from the middle of May 2023.

Finance Minister, Ken Ofori-Atta is currently leading government delegation to China ,hoping to reach  a deal with the Asian economic giant to restructure Ghana’s debt of ¢1.7 billion.  

Focus of Ghana Programme with the IMF

According to the Staff Level Agreement Ghana reached with the Fund, the IMF programme aims to support Ghana’s efforts to restore macroeconomic stability, debt sustainability, while also protecting the vulnerable, preserving financial stability, and laying the foundation for strong and inclusive growth.

On December 12, 2022 the IMF reached a staff level agreement with Ghana on a three-year programme supported by an arrangement under the ECF.

Pre-conditions for Ghana to secure a programmme

As part of the requirements Ghana is expected to restructure its domestic debt and external debt.

The Government is also expected to publish the Auditor General’s report on the Audit of COVID-19 spending undertaken from March 2020 to June 2022, this is expected to ensure transparency and accountability of the COVID-19 Emergency Spending.

Ghana is also expected to implement an upfront weighted electricity tariff of 30 percent, excluding lifeline. This is expected to reduce the current cost of recovery in the energy tariffs and power sector shortfalls. 

Government is also expected to pass some three key revenue measures. These are; the Income Tax Amendment Bill, Excise Duty Amendment Bill and the Growth and Sustainability Amendment Bill.

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