Review the IMF deal – IEA’s Kwakye tells Mahama

Economist and Director of Research at the Institute of Economic Affairs (IEA), Dr John Kwakye, has told the newly-elected president of Ghana, John Dramani Mahama to review Ghana’s ongoing programme with the International Monetary Fund (IMF).

He expresses the view that a review of the programme will ensure investor confidence in the Cedi and the local economy in general.

A post on his X page said “To strengthen investor confidence in the cedi and economy, President Mahama should constitute a team to review the IMF program. Pres Mahama should also constitute an Economic Advisory Council (EAC) of independent professionals to advise him on the economy.”

Dr Kwakye made the suggestion despite the recent comment from the Fund that Ghana made progress in strengthening its fiscal position ahead of the general elections on Saturday, December 7.

The Fund said, looking ahead,  staying the course of fiscal policy adjustment—including before and after the upcoming elections—and creating room to enhance social programs is paramount to put public finances on a sustainable path and reduce financing needs, while cushioning the vulnerable from the impact of fiscal adjustment.

The Bretton Woods Institution further stated that continued efforts to enhance domestic revenue mobilisation and streamline primary expenditure are key in this respect.

The Fund directed that these should be supported by continued progress in improving tax administration, strengthening expenditure control and management of arrears, implementing an enhanced fiscal responsibility framework, and improving State-Owned Enterprises (SOEs) management.

“Promptly and forcefully addressing the challenges in the energy sector is also critical to contain fiscal risks. Building on the recent successful Eurobond exchange, the authorities should also finalize their comprehensive debt restructuring in a timely manner.

“The authorities have maintained a prudent monetary policy stance while taking decisive steps to rebuild foreign reserve buffers. Going forward, maintaining an appropriately tight monetary stance, given the upside risks to inflation, and enhancing exchange rate flexibility are of the essence,” the Fund said after announcing that the Executive Board completed the third review of Ghana’s 36-month Extended Credit Facility Arrangement on Monday, December 2, allowing for the immediate disbursement of SDR 269.1 million, about US$360 million.

 

 

 

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