‘IMF focused on fiscal correction, protecting vulnerable’

Maxwell Akalaare Adombila Business News Jul - 13 - 2022 , 18:37

The International Monetary Fund (IMF) says it is focused on helping the government of Ghana to improve its fiscal balances in a sustainable way while protecting the vulnerable and poor.

It said the two issues were part of a raft of measures discussed during the first round of discussions on an economic support programme that ended Wednesday (July 13, 2022).

In a statement released by the IMF Mission Chief to Ghana, Carlo Sdralevich, after the eight-day meeting, the fund said the discussions also explored how to ensure credibility of the monetary policy and exchange rate regimes, preserve financial sector stability, and design reforms to enhance growth, create jobs, and strengthen governance.

The statement marked the end of the mission in Accra after it first arrived on July 6 on the request of President Nana Addo Dankwa Akufo-Addo for IMF support to stabilise and revitalise the economy.

The statement added that the team held initial discussions on a comprehensive reform package to restore macroeconomic stability and anchor debt sustainability.

It said the IMF would continue to monitor the economic and social situation closely and engage in the coming weeks with the government on the formulation of their Enhanced Domestic Program that could be supported by an IMF arrangement and with broad stakeholders’ consultation.

“We reaffirm our commitment to support Ghana at this difficult time, consistent with the IMF’s policies.

“Staff express their gratitude to the authorities, civil society, and development partners for their constructive engagement and support during the mission,” it concluded.

Below is a copy of the statement issued by the IMF after the meetings in Accra

An International Monetary Fund (IMF) staff team led by Carlo Sdralevich visited Accra during July 6-13, 2022, to assess the current economic situation and discuss the broad lines of the government’s Enhanced Domestic Program that could be supported by an IMF lending arrangement. The IMF team met with H.E. Vice President Bawumia, Finance Minister Ofori-Atta, and Governor Addison of the Bank of Ghana. The team also met with the Parliament’s Finance Committee, civil society organizations, and development partners, including UNICEF and the World Bank to engage on social spending.
At the conclusion of the mission, Mr. Sdralevich issued the following statement:
“Ghana is facing a challenging economic and social situation amid an increasingly difficult global environment. The fiscal and debt situation has severely worsened following the COVID-19 pandemic. At the same time, investors’ concerns have triggered credit rating downgrades, capital outflows, loss of external market access, and rising domestic borrowing costs.
“In addition, the global economic shock caused by the war in Ukraine is hitting Ghana at a time when the country is still recovering from the Covid-19 pandemic shock and with limited room for maneuver. These adverse developments have contributed to slowing economic growth, accumulation of unpaid bills, a large exchange rate depreciation, and a surge in inflation.
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“The IMF team held initial discussions on a comprehensive reform package to restore macroeconomic stability and anchor debt sustainability. The team made progress in assessing the economic situation and identifying policy priorities in the near term. The discussions focused on improving fiscal balances in a sustainable way while protecting the vulnerable and poor; ensuring credibility of the monetary policy and exchange rate regimes; preserving financial sector stability; and designing reforms to enhance growth, create jobs, and strengthen governance.
“IMF staff will continue to monitor the economic and social situation closely and engage in the coming weeks with the authorities on the formulation of their Enhanced Domestic Program that could be supported by an IMF arrangement and with broad stakeholders’ consultation
“We reaffirm our commitment to support Ghana at this difficult time, consistent with the IMF’s policies.
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“Staff express their gratitude to the authorities, civil society, and development partners for their constructive engagement and support during the mission.”