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Ghana close to securing $116m IMF program cash

June 27, 2017, 3:50 p.m.

The country is on track to receive some $116 million from the Internationa Monetary Fund (IMF) in July to support its import and export activities.

This would happen after the IMF board meets in July to review the country’s performance under the FUND program.

According to the IMF, Ghana has made progress in some targets, like dealing with the energy sector debts and recapitalizing some troubled commercial banks.

Country Representative of the IMF, Dr Natalia Koliadina, however, tells JOYBUSINESS there are some areas that need to be worked on to ensures a successful review by the board.

State of fourth review discussions with government

The IMF country resident representative indicated that “we have made significant progress in our discussions on the fourth review under the ECF, since our mission in April.

"These discussions helped us better understand fiscal implications of the new policies”, the director said.

“We welcome the progress made by the authorities in initiating an audit of unpaid bills and measures taken to address budget rigidities by introducing a cap on earmarked revenues”.

Pressing issues to resolved before board meeting

The IMF country representative, however, noted “we still need more details on several issues, including plans for addressing the high indebtedness and financial weakness of the energy sector, SOEs, and the weaknesses in the banking sector, we welcome our ongoing dialogue with the authorities and look forward to completing discussions within weeks”

Focus of the Executive Board meeting next in July

According to the IMF, they are yet to complete discussions Ghanaian authorities before the Board meeting could take place.

Dr. Natalia added “I cannot pre-judge the focus of discussions at the Board but, given that the program veered off track last year -t he 2016 budget deficit of 8.8 percent of GDP significantly exceeded the programmed deficit of 5.2 percent of GDP - the Executive Directors would like to see how the program is going to be brought back on track”.

She noted that “directors would like to see the measures which would help restore fiscal discipline and achieve fiscal consolidation, sufficient to bring public sector debt on a clear downward path.

"Furthermore, they may be interested in the measures which would strengthen fiscal management, improve the financial situation of the energy sector SOEs, and address the weaknesses in the banking sector."

Finance Minister’s Responds

The Finance Minister on his part is optimistic that Ghana would pass the fourth review to help it receive the next tranche of IMF cash.

The minister adds that the Finance Minister said Ghana would pass an assessment by the Fund when the board meets, adding that most of the prior actions have been met to aid the necessary assessment by the board.

The Minister cites some concrete steps being taken to clear the energy sector debts its $10 billion debt which would go a long way to address the current challenges facing the financial sector.