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IMF to prioritise banking crisis, GDP growth in 7th review

Sept. 11, 2018, 9:23 a.m.

As the International Monetary Fund (IMF) prepares for the seventh review of Ghana’s performance under the economic assistance program, some economists have outlined issues that are likely to top the discussions.

Among them are the government’s efforts at maintaining fiscal discipline as well as controlling the public sector expenditure.

The Fund is to meet the economic managers of Ghana and assess the country’s performance which could lead to the release of another tranche of disbursement.

Seventh review critical to Fund’s completion

The seventh review is considered critical as it is close to the end of the program by December this year.

For now, the exact time of the visit is not known but Economist, Dr. Eric Osei Assibey tells Citi Business News which areas will be on the radar for the discussions with the IMF.

“As far as I am concerned, I think the government is on track in achieving the inflation target; inflation is now within the single digit which is as expected as far as the program is concerned. But we are not too sure how the economy is performing particularly given what is happening to the banking sector which was not part of the program. We also don’t know how government revenue has performed since the last review,” he stated.

For Economist, Dr. Ebenezer Ashley, the Fund will be particular with the government’s efforts at meeting key economic growth targets which he says the government could meet the targets.

“I am sure the positives will outweigh the negatives because as we speak, if we compare the last two year’s GDP growth rate with last year’s figure, you realize we were able to leap forward considerably; in 2016, the GDP growth stood around 3 percent but for last year, we had about 9.05 percent. Also, the exchange volatility of the currency which we expect the economic management team through the Bank of Ghana, to arrest the situation,” he suggested.

Ghana went to the IMF for an economic assistance of 918 million dollars.

The assistance is to help the country restore economic stability by reducing the public sector wage bill.

IMF to reply Minority on Ghana – China bauxite deal

A key issue to look out for in the review is the Fund’s position on how it will classify the government’s barter agreement with China.

But Dr. Ebenezer Ashley insists this will least impact the program and here are his reasons.

“As we speak, we no longer have technically a loan; we are having the money and we’re paying readily for it through the mining of the bauxite which becomes a win-win situation for the country because first, we will receive the funds and use for the purposes it was intended without repaying. Second, the Chinese government will bring in equipment to mine the bauxite. Third, not only Chinese nationals will work on the bauxite, Ghanaians will also be employed,” he explained.

A total of 764.1 million dollars has so far been released from the total facility leaving 153.9 million dollars to be disbursed to Ghana.