Ghana’s government is under pressure to take immediate action as it awaits the International Monetary Fund’s (IMF) approval of a $370 million tranche. This follows a recent staff-level agreement between the IMF and Ghana, aimed at reviewing the country’s economic reforms and progress. Economists emphasize the need for continued momentum to secure full executive board approval and ensure the continuation of the bailout program. Without swift and decisive steps, experts warn, Ghana may face setbacks that could hinder its economic recovery.
Ghana’s $370 Million Bailout: A Step Closer to Approval
Ghana’s government is in the final stages of securing approval for the IMF’s $370 million loan disbursement. The IMF’s staff-level agreement was reached after assessing Ghana’s progress on key policy reforms and economic targets. According to economic analysts, the next crucial step is for the government to assure the IMF that it will continue to meet the necessary criteria to finalize the deal.
Speaking to Citi Business News, Professor Godfred Bokpin, an economist at the University of Ghana, highlighted the importance of sustaining the positive momentum that has been built. He pointed out that while the IMF has recognized the government’s efforts, certain reservations remain in the staff report that must be urgently addressed.
Fiscal Challenges and IMF Concerns
Despite the recent progress, the IMF has expressed concerns over Ghana’s performance toward the end of 2024. The Fund identified several key issues, including fiscal slippages that occurred ahead of the general elections. These slippages led to increased outstanding payments, unmet inflation targets, and delays in essential reforms.
The IMF’s report suggests that while the government has made strides in managing its economy, it must take immediate corrective action to prevent further setbacks. The IMF’s executive board is expected to meet soon to review the situation and provide final approval for the $370 million tranche.
Corrective Measures and the Role of the New Administration
In response to these challenges, Ghana’s new administration has introduced a series of corrective measures aimed at restoring the program’s momentum. One key development is the introduction of a more disciplined national budget for 2025. This budget is designed to curb fiscal deficits and bring the country’s finances back on track. Additionally, public financial management reforms are being strengthened to ensure more efficient and transparent use of government resources.
Structural Reforms to Strengthen Ghana’s Economy
Alongside fiscal measures, the IMF mission has engaged in talks with Ghana’s authorities to address long-standing structural weaknesses. These include issues with fiscal management, procurement processes, and social protection systems. The goal is to ensure that the most vulnerable segments of the population are protected from the negative impacts of inflation and fiscal adjustments.
The IMF has also focused on the need for greater transparency in the management of state-owned enterprises (SOEs), particularly in key sectors such as gold, cocoa, and energy. These sectors are critical to Ghana’s economy, and reforms in their management are expected to improve financial stability and investor confidence.
Bank of Ghana’s Efforts to Combat Inflation
The Bank of Ghana has also been taking steps to support the country’s economic recovery. Recently, the central bank raised its policy interest rate, a move that aims to curb inflation and stabilize the currency. The IMF has praised the Bank of Ghana for its proactive stance, noting that these measures will help support the overall goal of economic stabilization.
The Path Forward: What’s Next for Ghana?
As Ghana awaits final approval for the IMF’s $370 million bailout, economists are urging the government to act swiftly to address the remaining concerns. Continued progress in fiscal discipline, public financial management, and structural reforms will be critical for securing long-term economic stability.
Professor Bokpin emphasized that while the government has made significant strides, there is no room for complacency. “The government has demonstrated good faith, but there are still important
