The International Monetary Fund (IMF) Board Tuesday approved the disbursement of $116.6 million to Ghana.
A statement issued by the IMF said the approval followed the completion of the first review of Ghana’s economic performance under the programme supported by an Extended Credit Facility (ECF) arrangement.
“Completion of the review enables the disbursement of $116.6 million, bringing total disbursements under the arrangement to about $233.1 million,” it said.
In completing the review, the Executive Board granted waivers for the non-observance of performance criteria regarding gross credit to the government and non-accumulation of external arrears, based on their minor and temporary nature and the corrective measures put in place by the authorities.
Besides, it said, the board approved the authorities’ request for modifications of performance criteria.
Ghana’s three-year arrangement for about $918 million was approved on April 3, 2015. The arrangement aims at restoring debt sustainability and macroeconomic stability in the country to foster a return to high growth and job creation, while protecting social spending.
Following the Executive Board’s discussion on Ghana, the acting Chairman and Deputy Managing Director of the IMF, Mr Zhu, said: “Implementation of the ECF-supported programme by the Ghanaian authorities has been broadly satisfactory, despite an unfavourable economic environment.”
In particular, he said, “the government’s fiscal consolidation efforts are on track and it is encouraging that the government decided to liberalise the prices of fuel products, which bodes well for expenditure control, eliminating the need for fuel subsidies and the incurrence of arrears”.
Mr Zhu asked the government to firmly continue with its fiscal consolidation efforts to fully restore macroeconomic stability and mitigate financing risk.
In that regard, he said it was crucial to continue the policy of controlling the wage bill by adhering to the net hiring freeze, excluding health care and education, while further implementing the payroll clean-up plan.
“The government should continue to adhere to the domestic arrears clearance plan and avoid incurring any new arrears. Implementing structural reforms to strengthen expenditure control will support these efforts. At the same time, the government should use the resulting fiscal space to enhance its social protection programmes to mitigate the potential impact of the fiscal consolidation on the poor,” he said.