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Fri, Jan

GHANA CAN MANAGE WITHOUT IMF

Business & Economy

The managing director (MD) of the International Monetary Fund (IMF), Christine Lagarde, says Ghana has everything it takes to do without an IMF programme.

The managing director (MD) of the International Monetary Fund (IMF), Christine Lagarde, says Ghana has everything it takes to do without an IMF programme.

Her comment comes against fears that rising public debts and budget overruns could result in another IMF bout with Ghana, which exits the IMF programme technically by the end of this year.

Answering questions in a "Town Hall" meeting in Accra, Madam Lagarde said the measures government is putting in place now should help stabilise the economy.

The gathering brought together the Bank of Ghana governors, banking chiefs, civil society groups, academia and other such stakeholders in the national economy. The meeting was meant to engage one another in building consensus on the way forward as Ghana stabilises its fiscal foundations and moves into the next level in enhanced productivity and growth.

“You know your country better than I do. It seems to me on the face of it, particularly if the resolve that I have heard from the President, from the Vice-President, from the Finance Minister, from the Governor of the Bank of Ghana, if there is that resolve to actually stay the course and maintain that fiscal discipline, I think the country has everything it takes to do without an IMF programme,” Christine Lagarde said

She added, “I very much hope that there would not be these external shocks, whether it takes sharp and durable drop in commodity prices or massive increases in tensions that could hamper any trade.

“ I hope that doesn’t happen because, if it did, then clearly not just Ghana, but quite a few other countries would need our help and we stand ready.”

She, however, cautioned that Ghana adds political maturity to fiscal responsibility in staying that course.

“We need to be ready and available for that. I think, in addition to political maturity, we can develop fiscal responsibility.”

Extended credit facility

The IMF’s Extended Credit Facility (ECF) provides financial assistance for countries with protracted balance of payment problems.

In 2015, the Ghana government entered into an agreement with the IMF for economic assistance. The deal concluded with funding support of $918 million to be disbursed to Ghana under eight tranches.

Some key issues of the credit facility included the freezing of public sector employment, reducing the budget deficit and zero financing of the budget deficit by the BoG.

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