The International Monetary Fund (IMF) has indicated that it is premature to comment on the final form the financing programme for Ghana will take.

In its latest Frequently Asked Questions (FAQ), it said the IMF Executive Board will decide the level of access (credit amount) and the final programme design.

“The previous arrangement with Ghana was a three-year Extended Credit Facility (ECF) in 2015-2018, which was extended to April 2019. However, since negotiations are ongoing, it is premature to comment on the final form the latest financing program will take”.

It further reiterated that the goal of the government’s economic programme, which would be supported by IMF financing, is to restore macroeconomic stability and ensure debt sustainability, support the credibility of government policies, restore confidence in the central bank’s ability to manage inflation and rebuild foreign exchange reserve buffers to make the economy more resilient to shocks.

“Specifically, in the fiscal sector, an important policy objective would be to increase revenues, critical for debt sustainability while safeguarding spending on health, education, and social protections”, it added.

Sustainability of government finances

On whether Ghana needs debt restructuring, the Fund said when an IMF member country requests financing, the Fund assesses whether the country’s policies are consistent with debt sustainability. 

This assessment, it said, is based on a Debt Sustainability Assessment (DSA) conducted jointly by the IMF and World Bank to determine whether the government is able to meet all its current and future payment obligations.

The last DSA published in the 2021 Article IV Staff Report concluded that: “Public debt was sustainable conditional on a rigorous and credible implementation of the authorities’ medium-term consolidation plan to put debt on a declining trajectory and ensure continued market access.

In their recent 2023 budget statement, the government assessed the public debt as unsustainable over the medium term. In this regard, the government has announced its  intention to conduct a debt operation to ensure debt sustainability.

The Fund said “we welcome the authorities’ intentions to implement policies that will ensure the sustainability of public finances. However, the nature of engagements and debt operations between Ghana and its creditors are sovereign decisions”.