An International Monetary Fund (IMF) staff team, led by Stéphane Roudet, Mission Chief for Ghana, will arrive in Accra tomorrow September 26, 2022 and continue discussions with government on policies and reforms that could be supported by a Fund lending arrangement.

The team will also further engage with other stakeholders including the Bank of Ghana, Parliament, business associations and civil society groups during the visit.

The discussions with government and other stakeholders will end on October 7, 2022.

This is coming after the downgrade of Ghana’s credit to further junk status by rating agency, Fitch.

Fitch downgraded Ghana’s Long-Term Local- and Foreign-Currency Issuer Default Ratings (IDRs) to ‘CC’, from ‘CCC’.

The downgrade, it said, reflects the increased likelihood that Ghana will pursue a debt restructuring given mounting financing stress, with surging interest costs on domestic debt and a prolonged lack of access to Eurobond markets.

IMF reaffirm commitment to support Ghana in difficult time

In July, 2022, an IMF staff team led by Carlo Sdralevich visited Accra to assess the current economic situation and discuss the broad lines of the government’s Enhanced Domestic Programme that could be supported by a Fund lending arrangement.

The IMF team met with Vice President Bawumia, Finance Minister Ofori-Atta, and the Governor of the Bank of Ghana, Dr. Ernest Addison. The team also met with the Parliament’s Finance Committee, civil society organizations, and development partners, including UNICEF and the World Bank to engage on social spending.

At the end of the meeting, it reaffirms its commitment to support Ghana at this difficult time, consistent with its policies.

“Ghana is facing a challenging economic and social situation amid an increasingly difficult global environment. The fiscal and debt situation has severely worsened following the Covid-19 pandemic. At the same time, investors’ concerns have triggered credit rating downgrades, capital outflows, loss of external market access, and rising domestic borrowing costs.

“In addition, the global economic shock caused by the war in Ukraine is hitting Ghana at a time when the country is still recovering from the Covid-19 pandemic shock and with limited room for maneuver. These adverse developments have contributed to slowing economic growth, accumulation of unpaid bills, a large exchange rate depreciation, and a surge in inflation”, it said.

It further said that it held initial discussions on a comprehensive reform package to restore macroeconomic stability and anchor debt sustainability, adding, the team made progress in assessing the economic situation and identifying policy priorities in the near term.

The discussions focused on improving fiscal balances in a sustainable way while protecting the vulnerable and poor; ensuring credibility of the monetary policy and exchange rate regimes; preserving financial sector stability; and designing reforms to enhance growth, create jobs, and strengthen governance.

It concluded that the IMF staff will continue to monitor the economic and social situation closely and engage in the coming weeks with the authorities on the formulation of their Enhanced Domestic Programme that could be supported by an IMF arrangement and with broad stakeholders’ consultation.