Ghana still in discussion over possible program extension

The International Monetary Fund (IMF) has indicated that it is still in discussion with Ghana over a possible extension of the Fund program.

Finance Minister Ken Ofori Atta at a recent engagement with media noted that government is committed to completing the program as scheduled on April 2018. He then admitted that this decision will not come easy for the economy.

This lead to some analysts concluding that Ghana may not request for a program extension during the spring meetings in Washington DC, despite the expected difficulties that may come along with completing the program as scheduled.

But in a response to a question from JOYBUSINESS at the ongoing IMF/World Bank spring meetings in Washington DC, Head of Africa Department, Abebe Amero Selassie, said the program extension would be based on finalizing current discussions with government of Ghana.

“We are in discussions and we will let you know as soon as a decision has been taken by the government of Ghana,” he said adding that program extension ultimately rests with managers of the economy.”

Mr. Selassie added that government has asked for more time and they are considering how best to move forward with the program, that the country has invested in.

“We are happy for government to finish its deliberations and we are also initiating back and forth discussions,” he said.

The African department head of the IMF also noted that since the program is facing some challenges, there might be the need for significant adjustment over the coming year he added.

Mr. Selassie said, “I want to highlight in particular the kind of report that needs to be one in the energy sector, which will give us a source of pressure on public accounts and that will impact the banking sector also.”

Should government go ahead and issue a Eurobond to address funding gap?

The IMF Africa boss said regarding issuing Eurobonds, it is not about whether government should be allowed to borrow or not, but rather about getting the fiscal path and getting it on point.

“Getting the fiscal accounts to a level which makes sure that it stops accumulating and clear on a downward path. This is because that is the objective of the program,” he said. 

“Whether to finance or target the deficit via Eurobond or domestic market, you know that’s a technical matter and will have to be looked at in particular context,” he added. 

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