IMF wants more money for Ghana

The International Monetary Fund (IMF) mission in Ghana has proposed that the fund management should increase the country’s access to the Poverty Reduction and Growth Facility (PRGF) to $49 million to support balance of payment needs.

This means that when the country’s programme is approved by the fund, it would have net disbursement of $45m this year.

IMF Resident Representative, Mr Girma Begashaw, who announced this at the just ended Enhanced Mini Consultative Group Meeting in Accra, urged the international donor community to provide the sustained support that Ghana needs to enable the country to carry her economic programmes through.

He said the donor community could help by quickening financial assistance, ensure aid co-ordination and disbursement procedures. In addition, it could help to meet critical capacity building and technical assistance requirements.

The mission has seen the government’s commitment to implementing strong programme of policies and recommended that the current review of the PRGF be completed subject to the implementation of certain key prior actions, said Begashaw.

He noted that the government’s commitment is seen in the establishment of a high-level Economic Policy Co-ordinating Committee to manage and monitor expenditure commitment a and cash transaction month by month.

In addition, a cashflow commitment forecasting system will be established shortly to ensure that expenditure commitment by each ministry department and agency does not exceed the projected cash allocation for the MDAs. Such move would ensure that broad allocation of spending can be tracked.

Mr Begashaw cited the comprehensive audit of stock of domestic payment arrears so as to announce by the end of August, this year, a timetable for the their liquidation. Furthermore, improved procedures are being worked out to ensure the full and timely settlement of external debt service obligations.

Indications from the government are that it would work, over the coming months, expenditure monitoring systems which will enable close tracking of poverty related expenditures, including those that will be funded by possible debt relief under the Heavily Indebted Poor Countries (HIPC) initiative.

Mr Begashaw also referred to the proposals that the Bank of Ghana will use real interest rate to mobilise funding for the government, increase cedi savings and prevent an outflow of foreign exchange .

The fund, he pledged, will help the central bank to create a functioning interbank foreign exchange market this year. The move is to phase out direct sale of foreign exchange to importers, including major parastatals, and channel such transactions instead through the commercial banks.