Ghana has everything it takes to do without an IMF programme – IMF boss

Managing Director of the International Monetary Fund (IMF),Christine Lagarde says Ghana has everything it takes to do without an IMF programme.

Ghana is expected to end the IMF programme technically by the end of this year. But there are fears that rising public debts and budget overruns could send Ghana back to the fund.

Answering questions in a town hall meeting in Accra, Madam Lagarde said that the measures that government is putting in place now should stabilise the economy.

“You know your country better than I do; it seems to me on the face of it, particularly if the resolve that I have heard from the president, from the vice-president, from the finance minister, from the governor, if there is that resolve to actually stay the course and maintain that fiscal discipline, I think the country has everything it takes to do without an IMF programme,” Christine Lagarde said.

She added, “I very much hope that there would not be these external shocks, whether it takes sharp and durable drop in commodity prices or massive increases in tensions that could hamper any trade. I hope that doesn’t happen because if it did, then clearly not just Ghana but quite a few countries would need our help, and we stand ready.

“We need to be ready and available for that. I think in addition to political maturity, I think that fiscal responsibility can be developed, and it requires buying and it requires explaining, but I think it in the seeds of the tree that you are nurturing.”

The gathering is to bring together the Bank of Ghana governors, banking chiefs, civil society groups and academia.

Extended Credit Facility

The IMF’s Extended Credit Facility (ECF) provides financial assistance for countries with protracted balance of payment problems.

In 2015, the Ghana government entered into an agreement with the IMF for economic assistance.

The deal concluded with funding support of $918 million to be disbursed to Ghana under eight tranches.

Some key issues of the credit facility included the freezing of public sector employment, reducing the budget deficit and zero financing of the budget deficit by the BoG.