IMF says confident Ghana will meet April review requirements

PUBLISHED: Tue, 06 Mar 2018 11:28:38 GMT

The International Monetary Fund is confident Ghana will implement outstanding measures needed for a successful review of its $918 million aid programme next month, the Fund’s Ghana chief said on Monday.

The major commodities exporter is in the final year of the programme, signed in April 2015 to restore stability to an economy dogged by deficits, public debt and low growth with inflation consistently above target.

A confidential document seen by Reuters on Friday said the IMF wants Ghana to adopt new measures to boost revenues, slow the pace of borrowing and outline plans to clean up the financial sector.

“The ongoing macroeconomic stabilization is an opportunity to reduce the cost of debt, by reducing risk premia and refinancing it on more favourable terms, including by issuing a Eurobond,” Natalia Koliadina told reporters on Monday.

Finance Minister Ken Ofori-Atta said last week the government planned to issue up to $2 billion of sovereign issuance by June to pay down debt that hit 68.7 percent of GDP last November and help finance the 2018 budget.

Koliadina said an IMF staff mission which left Accra on Thursday discussed options for revenue mobilization with the authorities, including by broadening the tax base and rationalising tax incentives.

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The Fund expects the central bank to continue its disinflation policy to support exchange rate stability, she said. “This requires the Bank of Ghana to maintain focus on price stability.”

Koliadina said IMF staff expect to finalise discussions on the remaining issues to allow Ghana proceed with the proposed IMF board review in April.

Reporting by Kwasi Kpodo; Editing by Hugh Lawson