Source: newsthemegh.com
The Bank of Ghana’s governor, Dr. Ernest Addison, has voiced concerns that this year’s $3 billion Fund program could be derailed by the approaching general elections.
The government’s prior election-year failures to maintain strict fiscal consolidation measures and maintain prudence serve as the foundation for the governor’s concerns.
“We must continue with steadfast programme implementation of policies, continue with the fiscal rectitude, continue with the tight monetary policy stance, and pursue the necessary structural reforms to underpin the sustainability of the progress we are making.
“In Ghana’s recent history, we have not been able to successfully implement an IMF-supported programme in an election year without derailment. The Government and the Central Bank are committed to changing that narrative. We recognize the importance of continued macroeconomic stability and an early return to the capital markets, and we will remain committed to ensure that programme implementation stays firm,”, he made these remarks on Friday during a press conference organized by the Bank of Ghana, the Ministry of Finance, and the IMF.
Ghana is notorious for its tendency to overspend during election years, which causes significant financial problems.
This is the case even though the nation has advanced significantly in the years preceding the election year in terms of revenue growth and fiscal consolidation.
The government is already expected to run a 5.9% GDP budget deficit in 2024 compared to a 4.6% budget deficit for 2023, with GHS 226.7 billion in expenses and GHS 176.4 billion in total earnings and grants.
A staff-level agreement on economic policies and reforms has been reached by the IMF and Ghana to wrap up the second assessment of the 36-month program supported by the ECF.
When the study is officially concluded by the IMF Executive Board and approved by IMF Management, Ghana will have access to around $360 million in loans.
Ghana has performed admirably overall under the program, meeting the majority of the quantitative goals and putting important reforms into place.
The IMF claims that the robust policies and persistent efforts of the Ghanaian authorities have continued to produce favorable outcomes: economic growth has exceeded original projections, inflation has decreased, and in 2023, both the country’s fiscal and external positions have greatly improved.