Programme extension is crucial to complete review – IMF

Business News of Thursday, 20 July 2017



Imf Logo 2Ghana will complete the IMF programme through our budget cycle of January 2018 through December 2018

The International Monetary Fund (IMF) says a request for programme extension is crucial for them to complete Ghana’s assessment.

The Fund’s comment is in response to President Nana Akufo-Addo’s remark at a press encounter Tuesday that the IMF programme would not be extended.

According to the President, Ghana is committed to implementing the necessary reforms under the programme, but would not extend it when it ends in April 2018.

Finance Ministry clarification on the President’s remarks

“Government will like to clarify that, Ghana will complete the IMF programme through our budget cycle of January 2018 through December 2018 as stated by the President,” the Finance Ministry said in a statement.

The Ministry added that the 2018 budget would, therefore, be the last budget under the current IMF programme, “after the completion of the programme at the end of the budget cycle in December 2018, the government will not extend it.”

The Ministry emphasised that the President’s remarks should, therefore, not be interpreted to mean that the government is pulling out of the Programme.

On the contrary, government will continue with and complete the IMF program through the budget cycle of January 2018.

E-mail responds from the IMF

But in an email responds to JOYBUSINESS’ set of questions sent to the Fund, the IMF added that the call by the President to move Ghana beyond aide is admirable.

This is because successful completion of the IMF-supported programme would help achieve this goal by restoring macroeconomic stability, adding that “a request for program extension is essential for our ability to complete the review”.

Postponement of IMF board meeting

On postponement of the executive board meeting, which should have happened on July 26, the Fund in the email said the change in date was due to certain issues, “therefore we decided to move it to the end of August also factoring in the summer Board recess.”

The Fund was, however, quick to add that they have made significant progress in the programme discussions and it expects to reach an understanding on all remaining issues in the coming days.

“However discussions have taken a bit longer than originally expected, impacting the Board date as we need to respect our internal rules and procedures for the preparation of Board documents,” the Fund said.

Addressing prior actions before Board Meeting

The government has been working on the issues which need to be implemented before the Board meeting with the IMF said, “We welcome the completion of the audit and financial viability analysis of SOEs and the approval of the Act aiming to reduce the level of revenue earmarking”.

We have reached understandings with the fiscal framework for 2017 and the Bank of Ghana has been implementing its Roadmap for Financial Stability the IMF in a statement noted.

IMF and developments in the banking sector

The Fund has maintained that the country’s overall financial system remains adequately capitalized, however, it was of the view that “specific banks and microfinance institutions could hamper credit growth and investment, create contingent liabilities for the government and ultimately add to the public debt burden.”

The Fund noted that the Bank of Ghana has been taking important and welcome steps, in line with its Roadmap for Financial Stability.

“These include addressing shortfalls in provisioning and capital, and weaknesses in some individual banks-a precondition for improving the availability and affordability of credit to the private sector.”

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