IMF congratulates Ghana for securing Bailout; Promises support for reforms implementation

Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), conveyed her joy and extended congratulations to President Akufo-Addo on successfully securing a bailout program. She declared the IMF’s preparedness to assist the government in implementing reforms to address the prevailing economic and financial crisis in the country.

In a tweet on May 17, Mrs. Georgieva disclosed this news following the approval of a $3 billion program for Ghana by the IMF Executive Board.

She commended President Nana Addo Dankwa Akufo-Addo and his team on the approval of the IMF-supported program, expressing solidarity with Ghana’s reform efforts to tackle the ongoing economic and financial crisis and foster a better future for all Ghanaians.

The IMF approved Ghana’s request for a $3 billion Balance of Payment support on May 17, with the first tranche of approximately $600 million scheduled to be disbursed on May 19th.

The second tranche is expected to be disbursed by December 2023. The three-year program aims to support Ghana’s economic reform initiatives, addressing fiscal and external imbalances, strengthening the financial sector, and promoting inclusive growth.

Ghana has faced economic challenges, including high public debt, a significant fiscal deficit, and a widening current account deficit. The COVID-19 pandemic and the Russia-Ukraine war have further impacted the economy, resulting in a contraction in growth and reduced revenues.

As part of the $3 billion support program, the IMF has proposed measures such as eliminating tax exemptions, adjusting fuel levies, and increasing income tax to enhance revenue mobilization.

The IMF Managing Director emphasized that the program marks the initial step toward restoring Ghana’s economic stability. She also acknowledged the important progress made through the commitment of the Official Creditors Committee to help ensure Ghana’s debt sustainability, which was crucial for the program’s approval and represents a significant milestone for the G-20 common framework.

However, the Ghana National Chamber of Commerce and Industry expressed discontent with the IMF’s suggestions, with concerns that implementing the proposed conditionalities could exacerbate challenges for businesses. Despite this, Kristalina Georgieva expressed gratitude for the strong partnership between Ghana and the IMF and reiterated the Fund’s commitment to supporting the country in the future as it strives to build a stronger and more inclusive economy.

The CEO of the Ghana National Chamber of Commerce and Industry, Mark Badu-Aboagye, voiced his discontent with the IMF’s recommendations, expressing concerns about the potential adverse effects on businesses.

He emphasized that the introduction of external factors such as taxes, high-interest rates, and levies would negatively impact their bottom line, leading to increased losses. Badu-Aboagye emphasized the need to manage these aspects to provide proper support to businesses.

In response to these concerns, Kristalina Georgieva, the IMF Managing Director, acknowledged the strong partnership between Ghana and the Fund. She reiterated the IMF’s commitment to supporting the country in the coming years, recognizing the importance of building a stronger and more inclusive economy for all Ghanaians. Georgieva emphasized that the IMF looks forward to continuing this partnership and supporting Ghana in its endeavors.

The approval of the $3 billion IMF-supported program marks a significant milestone in Ghana’s efforts to address its economic challenges. With the disbursement of funds and the implementation of the proposed reforms, the country aims to stabilize its economy, reduce fiscal and external imbalances, strengthen the financial sector, and promote inclusive growth.

The government of Ghana recognizes that tough measures, such as scrapping tax exemptions and adjusting levies, may be necessary to enhance revenue mobilization. These steps, although potentially challenging for businesses, are seen as vital for the country’s long-term economic stability and sustainability.

As Ghana moves forward with the IMF program, it is expected to receive continuous support from the Fund to ensure the successful implementation of reforms and the achievement of its economic goals. The partnership between Ghana and the IMF will play a crucial role in guiding the country’s path toward a stronger and more resilient economy that benefits all its citizens.

Surce:Mynewsafrica.com