The Executive Board of the International Monetary Fund (IMF), has approved a three-year Extended Facility Programme (EFP) amounting to SDR 664.2 million (about US$ 918 million).
The EFP which is 180 per cent of Ghana’s IMF quota, comes in the wake of government’s decision to sign onto an IMF programme on Friday, August 8, to help address the current macro-economic challenges and safeguard the medium-term prospects.
A statement from the Ministry of Finance signed by the Minister, Mr Seth Terkper, said this EFP, consistent with the 2015 budget and government’s Home Grown Programme, “aims to restore debt sustainability and macroeconomic stability to foster a return to high growth and job creation through agriculture and infrastructure investment, while protecting social spending.”
The statement conceded that the pace of various government remedial programmes against the fiscal, current account deficits and other economic setbacks that had rocked the country since 2012, had not been fast as predicted.
The minister said though the 2014 Home Grown Policy Programme improved the situation a bit, “new and continuing adverse global and domestic developments continue to pose challenges to economic management”.
The falling prices of Ghana’s key commodities, especially gold and cocoa have caused a rapid depreciation of the Cedi while a recent decline in crude prices also created a revenue shortfall and necessitated a review of the 2015 budget.
Gas supply disruptions have also adversely affected energy supply and economic activity.
“Government expects that the programme will boost grant disbursements from development partners, improve macroeconomic stability, help support the credibility of government’s policy and boost investor confidence in the economy”, the statement said.
According to the ministry, some new structural reforms would also be implemented under the programme, mainly in the areas of revenue administration, tax policy, public financial management, payroll and human resource management, debt management, and supervision and regulation of the financial system.
The ministry said the programme implementation would be over a period when the short-to-medium term prospects of the economy remain strong and supported by potential for further oil and gas exploration and production, further expansion of the services sector, potential for increased FDI, as well as completion of the gas pipelines and processing plant.
By Times Reporter