Finance Minister says economy is strong and will inure to the benefit of all: Hints of $360m IMF transfer this week

The Minister of Finance, Dr Mohammed Amin Adam, has stated that the economy is recovering strongly and faster, on account of the structural reforms that have been firmly instituted.

He said since the country signed on to the International Monetary Fund (IMF) programme in May last year, the government had been implementing key fiscal, monetary and real sector policies as well as structural reforms to address the difficulties the economy faced in 2022, largely on the back of global shocks and as domestic vulnerabilities.

Addressing the press in Accra yesterday, Dr Amin Adam said Ghanaians had begun to see the benefits of the effective implementation of the programme, adding that macroeconomic stability had been restored largely, with inflation and exchange rate generally stabilised.

“The economy is recovering strongly and faster, and structural reforms, including those on Public Financial management, financial sector, revenue optimisation, expenditure rationalisation, social protection and exchange rate management, have been firmly instituted,” he said.

IMF money

Providing updates on the economy, Dr Amin Adam said that the Executive Board of the IMF had approved the third review of Ghana's three-year programme with the fund.

This will pave the way for the release of $360 million to the country this week under the fund’s Extended Credit Facility (ECF) Programme with Ghana.

It would bring the total funds so far disbursed by the IMF to $1.92 billion under the programme.

Restoration

“I am delighted to announce that the IMF Executive Board yesterday approved the third review of the IMF-supported Post COVID-19 Programme for Economic Growth (PC- PEG) following the Staff Level Agreement reached between the IMF Staff and Government of Ghana in October 2024.

“When we designed the IMF-supported PC-PEG in 2023, we set for ourselves an ambitious objective to restore macroeconomic stability and debt sustainability,” he said.

The government, Dr Amin Adam said, also sought to build resilience through the implementation of ambitious and wide-ranging structural reforms and laid the foundation for a stronger and more inclusive growth while protecting the poor and the vulnerable.

Post-COVID-19

Dr Amin Adam explained that the assessment of Ghana’s performance by the fund showed that the country met all the six End-June 2024 Quantitative Performance Criteria (QPCs) and all four End-June 2024 Indicative Targets (ITs).

That was the first time Ghana had met all the indicative targets in a review, having witnessed a strong and continued rebound in economic activity with real Gross Domestic Product (GDP) growth accelerating to 6.9 per cent in 2024 second quarter, after 4.7 per cent in 2024 first quarter and up from 3.8 per cent in 2023 fourth quarter driven largely by robust performance in the industrial, the agricultural and the information and communications technology (ICT) sectors, he stated.

The first half of 2024, the Finance Minister said, therefore, recorded an “average growth rate of 5.8 per cent, the highest in the past five years, and that was a strong signal that GDP growth was gradually returning to pre-pandemic growth levels”.

Robust

“Though the Ghana Statistical Service (GSS) has not yet released the 2024 third quarter GDP data, data from the Bank of Ghana shows GDP growth was still robust in the third quarter with the Composite Index of Economic Activity (CIEA) recording a growth of 2.8 per cent in quarter 3, 2024,” the minister said.

That, Dr Amin Adam added, was a strong rebound from the contraction of 2.4 per cent observed during the same period in 2023 and outperformed the inflation target set under the programme.

He said the country’s success in the conclusion of another IMF Review, with admirable speed compared to her peers was a testimony to the country’s ability to implement agreed-upon economic reforms and address structural issues.

“The testament by the IMF demonstrates the confidence the international community has in our economy and attests to our firm commitment to the policies, structural reforms, and programme objectives and targets under the programme.

“It is a testament to our collective effort and resilience that continues to drive Ghana’s economic recovery,” he said.

Eurobond

With the recently completed external debt restructuring exercise, which saw 15 outstanding Eurobonds exchanged into five new ones, he said the public and publicly guaranteed debt value had reduced by GH¢46.8 billion from GH¢807.79 billion in September 2024 to GH¢761.01 billion in October 2024.

“The public debt to GDP ratio therefore reduced from 79.2 per cent in September 2024 to 74.6 per cent in October 2024,” Dr Amin Adam said.