International Monetary Fund (IMF) Director of the Africa Department Abebe Aemro Selassie has disclosed that Ghana has met all the pre-conditions needed for its programme request to be approved by the executive board except financing assurance from the external Creditors.
He maintained that “we are now comfortable that all of the measures required for us to present the programme to our Executive Board are complete, except for the required financing assurances from Ghana’s external creditors.”
Mr Abebe noted that as soon as Ghana secures this financing assurance from the external creditors, the staff will move quickly to submit Ghana’s programme request to the executive board for approval.
He added “And we are now comfortable that all of the measures required for us to present the program to our Executive Board are complete, except for the required financing assurances from external creditors.”
The IMF African Department Director disclosed this in response to a question posed by JoyBusiness in Washington DC USA at the launch of the Regional Outlook Report for Africa.
IMF’s plea to Ghana’s creditors
Mr Selassie also made a strong case for Ghana’s creditors to fast-track negotiations by providing the financing assurance needed so the IMF can go to the board for Ghana’s programme approval.
“This is why we are also urging creditors to step forward and provide the financing assurances needed for us to present the program to the Board as soon as possible.
The IMF Africa Boss noted that they are very optimistic and keeping their fingers crossed this will happen in the next few weeks.
Ghana’s commitment to IMF programme
Asked about government’s commitment to the programme, Mr Abebe noted that noted “We are very encouraged by the steps that the government has taken over the last several months since the program request.
He also added that Government has taken several measures that support the programme approval by the board “It’s been a very difficult time of course, very difficult, very significant, measures that have had to be taken, and the initial steps that the government has taken are very encouraging.”
“Again, to look back to where I started, we’re very comfortable where- with all the steps that Ghana has done” he added
Dealing with Ghana’s Challenges
On whether Ghana has instituted the required measures to support the needed structural reforms, the IMF Africa Boss noted that “what is important to recognize is the challenges that Ghana has are something that needs to be addressed over the course of the program period”
The Director added that “over the next three, four years to bring the fiscal deficit to the level it requires”
He also noted that the reforms that are needed, are initiatives like revenue mobilization that are going to be really important to be done in a multi-year process, adding that “So, this is a really very important first step to reducing the macroeconomic imbalances Ghana faces in a durable.
“It is really the only way to move beyond having to rely on exceptional financing of the type that the IMF provides” The Director added.
Securing Ghana’s Board approval
Finance Minister Ken Ofori- Atta during a recent engagement with investors noted that Ghana should get an IMF Board approval in May 2023.
This is based on the work that Government has done over the past months in meeting the necessary Pre-Conditions for the IMF programme.
JoyBusiness engagement with some IMF officials has not disputed this proposed target being put out by government.
One official at the IMF who wants to remain anonymous for instance told JoyBusiness that “Ghana is on course to secure a programme very soon based on progress being made with the external creditors”.
Another IMF official who is close to the Ghana programme for instance told JoyBusiness “We are surprised by the progress made by Ghana when it comes to the pre-conditions, especially when it comes to the tough ones.”
When I asked one of the officials why Ghana should take this new target seriously when Government had earlier projected March ending 2023, he noted that “we all know why that March ending deadline was never possible, because Ghana not made significant progress towards meeting the pre-conditions for the programme.”
He also added that some of the measures that the Bank of Ghana has taken in terms of policy rate hikes has impacted the inflation rate which saw that significant decline for the month of March.
