Ghana Economists Urge Swift Action for IMF’s $370 Million Approval Amid Economic Challenges
Economists in Ghana are urging the government to expedite efforts in securing the necessary assurances from the International Monetary Fund (IMF) to ensure the smooth continuation of the country’s bailout program. Ghana has recently reached a staff-level agreement with the IMF after reviewing its progress on key reforms and economic targets, positioning the country for the release of a $370 million tranche in financial support. However, experts stress the importance of addressing lingering issues to secure full executive board approval from the IMF.
Professor Godfred Bokpin, an economist, emphasized that while the government has demonstrated good faith in its reform efforts, there are still unresolved issues that need immediate attention. Bokpin pointed out that while the IMF is inclined to approve the release, reservations noted in the staff report suggest the need for continued effort from the government before the final approval is granted. He highlighted that addressing these concerns promptly would ensure the country maintains the support of the Fund.
Despite the recent progress, the IMF flagged a notable dip in Ghana’s program performance towards the end of 2024. The IMF attributed this decline to fiscal slippages associated with the general elections, which resulted in missed inflation targets, delayed reforms, and increased outstanding payments. The IMF’s concerns underscore the need for further corrective measures by the government to maintain program momentum and safeguard financial stability.
In response to these challenges, the newly elected administration has outlined a series of corrective measures, including a more disciplined 2025 national budget and strengthened reforms in public financial management. Additionally, the government is addressing long-standing structural weaknesses in fiscal management and social protection systems, aiming to protect vulnerable citizens from inflationary pressures. The recent policy rate hike by the Bank of Ghana is also expected to help curb inflation and bolster the country’s economic stability.
Source: Citi newsroom