Ghana on course to end $918m IMF loan programme next year

Ghana intends to end its three-year $918m loan deal with the International Monetary Fund as scheduled in April of next year, the country’s finance minister said on Thursday.

Ken Ofori-Atta told a news conference that ending the IMF programme it inherited from the previous government “means a lot more hard work” and “some very tough decisions…regarding our deficit” in the 2017 budget.

His carefully worded comments come after two weeks of talks in the capital, Accra, with the IMF and may quell rumours the government led by President Anno Akufo-Addo would seek an extension of the bailout agreement the west African entered in 2015 to shore up its economy after gold, cocoa and oil prices fell and the currency plunged 40 per cent.

Mr Akufo-Addo’s victory in last year’s elections and his pledges to revive the economy have been viewed positively by markets.

But some observers say it would be a mistake to end the IMF programme on time next year as Ghana will not likely have achieved the fiscal consolidation that was the very goal of the programme.

“At the moment if they finish with a deficit of 6.5 per cent of GDP, that’s not a good place for Ghana to be in, it’s not a good outcome,” said an Accra-based economist.

Annalisa Fedelino, Ghana mission chief for the IMF, said the country has “a unique opportunity to turn the economy around” and the new government had “a strong electoral mandate to pursue the adjustment and reform needed” to restore macroeconomic stability.

But she also highlighted the government’s revenue projection of a 33 per cent increase in tax collection this year. Ms Fedelino called the projection “optimistic” and said the lender “is not the only one expressing that sentiment.”