The International Monetary Fund (IMF) says it will continue to work virtually with the Finance Ministry (MOF) and the Bank of Ghana (BOG) in the coming weeks over the government’s request for economic support from the Fund.

In a statement, the Fund said though the discussion is in an early stage, the mission was constructive and kick-started the process, laying the ground for our continued engagement.

“IMF staff will continue to monitor the economic and social situation very closely and engage with the authorities to formulate a homegrown reform plan that could be supported by an IMF arrangement and validated through a broader stakeholders’ consultation”.

 “To this end, the Fund and MOF and BOG teams will continue their work virtually in the coming weeks, while IMF experts will travel to Accra to provide technical assistance, including in tax policy and administration, and public financial management”, it added.

The mission said an IMF-supported programme aims to provide space for Ghana to implement policies which will restore macroeconomics stability and anchor debt sustainability, while protecting the most vulnerable parts of the population. It should help create the conditions for inclusive and sustainable growth and job creation. This will help strengthen policy credibility, alleviate exchange rate pressures, and provide catalytic effect on financing.

Type of programme eligible for Ghana

The IMF’s various lending instruments are tailored to different types of balance of payments need as well as the specific circumstances of a member country. 

The mission said “we are discussing with the Ministry of Finance and the Central Bank about the type of facility that would best fit Ghana’s needs.

The previous arrangement in Ghana was a three-year ECF in 2015-2018, which was extended by a year to April 2019.

Objectives of an IMF programme with Ghana

The goal of the government’s home-grown programme, which would be supported by IMF financing, is to restore macroeconomic stability and anchor debt sustainability, support the credibility of government policies, restore confidence in the Central Bank’s ability to manage inflation and accumulate foreign exchange reserves to help the currency withstand headwinds. Specifically on the fiscal sector, an important policy objective would be to increase revenues, critical for debt sustainability while safeguarding spending on health, education, and social protection.

Is Ghana’s request coming late?

The Fund said the economic situation in Ghana is certainly challenging, but there is still scope for the government to take the right steps toward restoring macroeconomic stability and preventing a deeper crisis.

Will the programme result in cut in the Free Senior High School programme?

The IMF mission said the discussion is at an early stage “we believe that the free Senior High School (SHS) is an innovative policy that needs to be protected. In general, IMF-supported programme seek to boost social spending while encouraging both efficiency and sustainability.”

“As discussed above, the IMF-supported programme would aim at protecting the vulnerable and creating conditions for an inclusive growth”.