Business News of Thursday, 5 February 2015
Government is now looking at a program with the IMF by the end of March.
President Mahama disclosed this in an interview with the Reuters news agency. This is the second time the President has moved the date forward. But does this give credence to concerns that Ghana is likely to get financial assistance from the Fund, by the second quarter of this year?
It is however not clear what has changed or influenced the President’s decision to push the date forward after announcing earlier this year that the program could be finalized by January.
Following that announcement, Joy Business also spoke to the leader of the Ghana team negotiating with IMF, Professor Kwesi Botchwey, who maintained that the program with the Fund should be finalised by February ending.
Nonetheless, for industry watchers who have been following the negotiations, the new date by the President could be difficult to meet, because of some concerns that the IMF and the European Union (EU) have raised.
The IMF and the EU are requesting a detailed plan on how to mitigate the impact of the declining crude oil prices on government’s revenue and how some 2 billion expected loss or hole in government revenue can be filled.
Also, they want to see a hold on hiring of new personnel to the public sector, and an aggressive programme to address data issues on government’s payroll.
Further, they are requesting a revised 2015 budget, a limit on the amount of money the Bank of Ghana can lend to government and reduction in inflation.
According to the country’s development partners, all these issues must be addressed before a programme can be finalised.
This means for the president’s revised date to be viable, most of these issues must be addressed quickly.
Joy Business has also gathered that normally it takes about six weeks for the IMF Board to work on a country’s report, so even if everything is concluded by the end of February, a programme will only be possible in April.
For many analysts any delay in securing a program with the IMF could have serious implications for the economy, especially to the stability of the cedi.
Ghana is hoping to secure about $1 billion from IMF under a three-programme for balance of payment support.