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‘Govt will not quit IMF austerity programme despite elections’

June 29, 2016, 8:45 a.m.

Ghana will not quit its current programme with the International Monetary Fund (IMF) and will not compromise on targets set under the three-year deal for elections this year, the Finance Minister said on Monday.

"We remain optimistic about this three-year programme and will ensure that all programme reviews are successfully completed through to 2017, given the enormous benefits to the economy," Seth Terkper told reporters in Accra.

Ghana, the world's second largest cocoa exporter, which also exports gold and oil, signed a three-year austerity programme with the IMF in April 2015 to fix its economy, plagued by deficits, high public debt and inflation consistently above target.

Under the deal, the West African country will receive up to $940 million from the fund as balance of payments support. It has so far received $228 million in two tranches.

However, markets fear a third disbursement scheduled for June could be delayed if spending overshoots targets in the run-up to a presidential election in November.

President John Mahama is seeking a second term in what is expected to be a close race between him and main opposition candidate Nana Akufo-Addo.

"Ghana will not quit the IMF programme, elections or no elections," Terkper said, adding that Ghana had drafted legislation to restrict the central bank from lending to the government to ensure it sticks to it.

Terkper said it would be presented to Parliament on Tuesday.

Ghana's public debt stood at 71 percent of gross domestic product at the end of 2015. Last week Nigeria cut gas supplies to Ghana because of unpaid bills.