Editorial: Fourth review unlocks about US$370million

A potential disbursement of about US$370million will arrive in the country  following a staff-level agreement (SLA) with the International Monetary Fund (IMF) on the fourth review of the Ghana’s three-year economic programme under its Extended Credit Facility (ECG) was reached.

However, this is subject to the IMF Executive Board giving approval in early July.  The agreement follows two weeks of discussions in Accra between IMF staff led by Mission Chief Stéphane Roudet and Ghanaian authorities, particularly the Ministry of Finance.

The successful review is a further step in government’s efforts to restore macroeconomic stability after fiscal slippages and reform delays marred the final quarter of 2024.

Although growth was higher than expected last year – driven largely by a strong performance in the mining and construction sectors – programme implementation faltered in the run-up to December’s elections.

Key challenges include a build-up of unpaid obligations, inflation overshooting its target and postponed reforms in critical sectors such as energy and finance.

Since assuming office in January, this new administration has implemented what IMF officials described as “bold measures” to realign the programme with its original objectives. Authorities have enacted a stronger fiscal framework, hiked electricity tariffs and tightened monetary policy to curb inflation and enhance macroeconomic discipline.

According to preliminary IMF assessments, primary fiscal balance posted a deficit of 3.25 percent of GDP at end-2024 – well off the programmed surplus of 0.5 percent.

The fiscal deterioration stemmed largely from unbudgeted expenditures, prompting government to initiate an audit of the payables using both the Auditor General and two international firms.

Once the Executive Board approves the review, Ghana will unlock the fifth disbursement under the programme, bringing total receipts from the IMF to US$2.3billion.

The current programme, approved in May 2023, aims to restore debt sustainability, support economic recovery and protect the vulnerable through targetted social spending.

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