Ghana has reached an agreement with the International Monetary Fund (IMF) for a three-year aid deal worth $ 1 billion to restore fiscal stability in the country.
According to Reuters, the agreement was reached on Wednesday but it’s subject to approval by the IMF Board.
The three-year deal, when finally approved by the IMF Board, is expected to help improve the country’s economy and restore investor confidence after a crunch in 2014.
The agreement was reached after several talks which started in September last year to address the economic challenges.
An IMF team arrived in the country last Thursday and used seven days to finalize discussions with the government on the bailout.
Now that an agreement has been reached, government will submit a letter of intent to the board, and approval is expected by April this year.
The Fund, after the first round of discussions with Ghana on a possible programme, underscored some key areas that government must tackle.
The IMF asked the Bank of Ghana (BoG) to review the new foreign exchange regulations, as well as the Single Spine Salary Structure (SSSS) which according to government exhausted more than 50 percent of its revenue.
The Fund also asked Government to eliminate subsidies on energy and petroleum products.
President John Mahama assured Ghanaians that the three-year programme would yield positive results.
IMF Bailout Not A Panacea
Meanwhile, Dr. Ekwow Spio-Garbrah, Minister of Trade and Industry, has stated that the IMF bailout would not be able to address the economic challenges facing the country.
According to him, the programme with the IMF would fail to meet its target if other development partners do not support the country.
Dr Spio-Garbrah made this known when William Hanna, EU Ambassador, paid a courtesy call on him at his office in Accra.
He said, ‘It is necessary for the IMF to commit to assisting Ghana to mobilize billions of additional funds from multilateral, bilateral and sovereign funds, family trusts and private equity sources.
‘We must be collectively bound to try and do this together to give additional comfort to foreign investors that Ghana is a safe place to invest,’ he said.
Mr Hanna, in his remarks, pledged the support of the EU and its partners towards Ghana’s economic transformation.
By Cephas Larbi
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