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Ghana's IMF-Supported PC-PEG Program Shows Positive Results

Ghana's IMF-Supported PC-PEG Program Shows Positive Results

Accra, 13th April 2024 – Ghana and the International Monetary Fund Mission have reached Staff Level Agreement on the ongoing IMF programme which will lead to the release of a further US$360 million when approved by the Executive Board in June.

This was disclosed at a joint press briefing to conclued a two-week Mission to review economic policies and reforms under the IMF supported Post Covid-19 for Economic Growth (PC-PEG) programme.

In his remarks, the Minister for Finance, Dr. Mohammed Amin Adam noted that the effective implementation of the programme had led to relative macroeconomic stability and signs of economic recovery.

“Ghana has successfully implemented various measures, including fiscal consolidation, revenue mobilization, expenditure rationalization, tight monetary policies, and structural reforms in key sectors of the economy” he added.

According to Dr. Amin Adam, the results of these efforts have been promising and stated that GDP growth exceeded expectations, with a growth rate of 2.9% at the end of 2023, surpassing the original target of 1.5% and the revised target of 2.3%. Inflation, which had peaked at 54.1% in December 2022, has seen a significant decline of 30.9 percentage points, reaching 23.2% by the end of December 2023. In early 2024, inflation continued to show positive progress, maintaining a rate of 23.2% in February but slightly increasing to 25.8% in March 2024.

These achievements, he opined, demonstrated the commitment of Ghana to fiscal and debt sustainability, as well as the pursuit of inclusive growth.  He revealed that the PC-PEG programme was instrumental in laying the foundation for a stronger and more resilient economy while prioritizing the well-being of the poor and vulnerable.

He touched on government’s unwavering commitment to ensure fiscal prudence this year and indicated that, “I also promised that I will hold the line when it comes to expenditure in this election year, as most election years’ expenditures have been reckless. I will hold the line this year and ensure that we do not embark on extra budgetary spending to ensure that the negotiated fiscal balances are met by the end of the fiscal year.”

The IMF Mission Chief, Mr. Stèphane Roudet, expressed their satisfaction with Ghana's performance under the programme and highlighted that, most of the quantitative targets set by the authorities were met, and significant progress has been made on key structural reform milestones.

The Fund also commended Ghana's strong policy and reform efforts, stating that these efforts are already yielding positive results.

Dr. Ernest Addison, the Governor of the Central Bank of Ghana also stated that his outfit has continued to strengthen reserve buffers and current account balance had improved.

According to him, despite the delays in disbursement of some donor support, the country’s foreign exchange reserves had remained steady and is reported as $6.2 billion as of 5th April 2024.

“We will continue to implement the policies that have helped sustain that progress including the innovative Gold for Reserve programme, which has acted as a game changer in our foreign exchange management strategies” he added.

As part of the agreement, once the IMF executive board completes the second review of the program, Ghana will have access to approximately $360 million in financial support. This additional funding will further strengthen Ghana's economic stability and help facilitate the implementation of crucial reforms.

The IMF-supported programme, which was approved by the IMF Executive Board in May 2023, aims to support Ghana's economic reforms and address key challenges in the country's fiscal and monetary policies. END