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Ghana government lacks urgency in securing IMF deal – Goldman Sachs

Ken Ofori Atta Finance Minister Agyapa Royalties Presser Finance Minister, Ken Ofori-Atta

Wed, 17 Aug 2022 Source: www.ghanaweb.com

A global investment and research firm, Goldman Sachs, has said there is a lack of urgency on the part of the Government of Ghana to secure an economic support programme from the International Monetary Fund.

In a guidance note to investors, the reputable firm said the 'no sense of urgency' verdict was despite the continuous delay in getting a deal on time, which could then force the Bank of Ghana (BoG) to increase its deficit financing of the budget.

Commenting on the possible IMF deal, Goldman Sachs said: "In our recent trip to Accra, one notable observation was the authorities’ perceived lack of urgency in concluding programme talks with the IMF (with locals expecting a six to nine-month timeframe), despite intensifying balance of payments (BoP), FX and fiscal financing pressures.

“We have argued that a delayed conclusion creates the risk of further deficit monetisation by the BoG, cedi depreciation and a decline in FX reserves, implying that the macroeconomic outlook may deteriorate further in the near term,” the investment and research firm said.

Goldman Sachs further pointed out the intense pressure on the Ghana cedi and government’s inability to finance its budget deficit could further increase the sense of urgency which could prompt government to fast-track bailout engagements with the IMF.

Ghana in July this year decided to seek financial support from the International Monetary Fund to restore macroeconomic stability, safeguard debt sustainability and among others

The country is said to be targeting an amount of $3 billion over three years from the IMF once an agreement on a programme is reached.

The new amount requested as a loan was double the government’s initial target of $1.5 billion.

GhanaWeb Business however understands that a possible deal with the IMF could be reached by the second quarter of 2023.

MA/FNOQ

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Source: www.ghanaweb.com
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