Gov't, IMF reach staff-level agreement over ECF programme; $370m to be made available by Fund

The government and the International Monetary Fund (IMF) have reached an agreement. This agreement outlines economic policies and reforms. It is part of the fourth review of the 36-month Economic Credit Facility (ECF) program.

This staff-level agreement needs approval from the Executive Board. Once approved, Ghana will access SDR 267.5 million, about US$370 million. This will raise total IMF support since May 2023 to SDR 1,708 million, or approximately US$2.355 billion.

The IMF noted that growth in 2024 is expected to be strong. This growth is supported by mining and construction activities. The external sector has improved due to solid exports, especially gold and oil. Higher remittances have also contributed to this improvement.

As a result, international reserves have exceeded ECF targets significantly. However, the overall performance under the IMF-supported program worsened at the end of 2024. Preliminary fiscal data show issues before the upcoming general elections due to increased payables.

Inflation has surpassed program targets as well. Several reforms and policy actions were delayed in fiscal, financial, and energy sectors. Despite these challenges, new authorities are taking bold steps to address these issues.

The government has started an audit of payables to understand their size and nature better. Preliminary estimates indicate a primary balance deficit of about 3¼ percent of GDP instead of a targeted surplus of ½ percent.

To tackle these issues, the government enacted a budget for 2025 aiming for a primary surplus of 1½ percent of GDP. They also adopted public financial management reforms including stricter expenditure rules.

Last week, an IMF mission visited Ghana to discuss structural reforms with authorities. Their focus was on improving governance and transparency in State-Owned Enterprises in gold, cocoa, and energy sectors.

The staff met with Finance Minister Forson and Bank of Ghana Governor Dr. Johnson Asiama along with their teams. They expressed gratitude for the continued cooperation from Ghanaian authorities and stakeholders.