Ghana's IMF bailout deal undergoes first review

The International Monetary Fund (IMF) has commenced its first review on Ghana following its approval of the extended credit facility for the country earlier this year.

The review which begun Wednesday June 19, 2015, is expected to end on 30th June 2015.

The IMF team, during the review meetings, will meet with the Finance Ministry, Ghana Statistical Service, Bank of Ghana and Parliament among others.

The IMF in April 2015 approved an Extended Credit Facility for Ghana worth about $918 million. The first tranche of the $918 million which was 114 million dollars hit the accounts of the Bank of Ghana on April 14, 2015.

The money was expected to help shore-up the value of the cedi, but it failed to do so.

Between that period to the first week of June 2015, the cedi continued its losing streak against major foreign currencies. According to the Bank of Ghana, from January to May 8, 2015; the cedi cumulatively depreciated by 17.2 percent against the US dollar, compared with 21.3 percent recorded in the same period in 2014.

Per the IMF deal, Ghana is expected to embark on a number of reforms and adhere to a number of conditions.

Prominent among them are managing its debt, rationalization of the public sector payroll, removal of subsidies, strengthening the effectiveness of the Bank of Ghana’s monetary policy role and increase the country’s tax collection among others.

The IMF is expected to be critical on these issues during the review meeting.

According to Finance Minister Seth Terkper, “for those that are due, they will be reviewed but it’s not about an event. In most cases, it’s about progress; so for example if we take payroll, what progress have we made, so they will be assessing things like that and some of them will be progressive as in what progress we have made with some of the issues,” he said.

Ghana’s struggling economy pushed it to seek assistance from the IMF last year.

The executive board of the IMF on Friday April 3, 2015, approved a three-year arrangement under the Extended Credit Facility for Ghana in support of the country’s medium-term economic reform programme.