Ghana expects deal with IMF by end March: President Mahama - CNBC Africa

Ghana expects deal with IMF by end March: President Mahama

Western Africa

by Reuters 0

Ghana expects to secure a financial assistance deal with the International Monetary Fund by the end of March.

This was to stabilise its economy and boost domestic reform, President John Mahama told Reuters on Tuesday.

The government aims to narrow the 2015 public sector wage bill to 40.5 per cent of tax revenue, from 49.3 per cent last year, he said, adding that it will also reduce the issuance of short-term instruments in a bid to restructure government debt.

(READ MORE: Challenges plaguing Ghana's economy )

Ghana grew strongly for years through gold, cocoa and oil exports and was seen as one of Africa's star economies, benefiting from the country's stable democracy.

But growth is due to slow sharply in 2015 as the government struggles to contain inflation, the budget deficit and a high debt-to-GDP ratio. The cedi currency also fell 31 percent last year and the government turned to the Fund last August.

(READ MORE: Ghana's fiscal problems threaten economic growth: IMF)

"Ghana is committed to securing an IMF programme and we are confident that we will reach agreement with the IMF by the end of this quarter," Mahama said.

The government recognises the need to contain public sector wages, which drove a spike in the deficit to nearly 12 per cent of GDP in 2012. The announcement last month of a 13 per cent wage hike for civil servants is within budgetary limits, he said.

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