The Ghana 'goodbye' letter Ken Ofori-Atta and Addison sent to the IMF

On March 7 this year, the Minister of Finance, Mr Ken Ofori-Atta, and the Governor of the Bank of Ghana (BoG), Dr Ernest Addison, officially communicated Ghana’s intention to exit from the extended credit facility (ECF) programme with the International Monetary Fund (IMF) in April 2019.

The letter was addressed to the Managing Director of IMF, Ms Christine Lagarde.

It followed successful completion of the programme, which took off in April 2015 with a primary objective of restoring debt sustainability and macroeconomic stability to foster a return to high growth and job creation, while protecting social spending.

In the letter, the two officials, on behalf of the government, extended “our gratitude to you, the Board and all Fund staff for being our trusted advisors.

“We are graduating from the ECF program on a strong note and are optimistic about our medium-term prospects to create a prosperous society for all,” it said.

It noted that the economy had responded positively to policies implemented during the IMF programme and cited the pick-up in growth and decline in inflation and the fiscal deficit as examples.

The letter also requested the Executive Board of the IMF to waive the nonobservance of the performance criteria (PC) on some key indicators that were missed.

It mentioned the missed criterion as the wage bill, the net international reserves of BoG, for both end-June and end-December 2018, the PC on the primary balance for end-June (although met for end-December) and the continuous PC on gross credit to the government by BoG (missed in November 2018 following the exceptional intervention of BoG in monetising the bond assigned to the Consolidated Bank Ghana as part of the financial sector clean up).

The waivers were prerequisites to the country completing the combined seventh and eighth reviews of ECF arrangement, and to disburse the seventh and eighth tranches totalling the equivalent of SDR 132.84 million, according to the letter.

Below is a full copy of the letter

Letter of Intent

Accra, March 7, 2019

Ms. Christine Lagarde Managing Director

International Monetary Fund (IMF) Washington, D.C. 20431

Dear Ms. Lagarde,

1. On behalf of the Government of Ghana, we hereby transmit the attached Memorandum of Economic and Financial Policies (MEFP) that sets out progress that has been made in the Extended Credit Facility programme which was agreed with the Authorities in April 2015.

2. Two years ago, this Government assumed office after winning an overwhelming mandate from the people ofGhana in December 2016. The Government inherited an economic programme that had been derailed with severe macroeconomic imbalances, significantly