The International Monetary Fund (IMF) has released $38.5m to the government of Ghana to fund the country's Poverty Reduction and Growth Facility project but with stringent conditions attached.
A release signed by Ag Managng Director of the fund Shigemitsu Sugisaki said government should continue to adjust prices to achieve full cost recovery for petroleum, electricity and water.
The amount which forms part of US$270m approved for Ghana in May last year is expected to put government on track with structural and monetary reforms.
Mr Sugisaki however praised the government for their successful conduct of macroeconomic policy in 2003, adding, it should liberalise the pricing of petroleum for the first half of the year 2004.
On privatisation, the IMF called on the Ghana Commercial Bank to strengthen its financial management and operational efficiency even though the planned divestiture of the Ghana Commercial Bank was suspended.
Again IMF wants government to follow the objective of reducing the domestic debt ratio by at least half over the three-year programme period and to strive to obtain monetary target, which should bring about the single digit inflation in early 2004.
Government's none-wage portfolio has also come under intense attack with a call from the top IMF official. According to him, government must continue with prudent expenditure that will not erode macro-economic gains.
On the Heavily Indebted Poor Countries Initiative, the IMF observed that Ghana needs to implement poverty reduction strategies emphasising the point that "continued strong programme implementation, together with action on the remaining policy triggers under the enhanced HIPC initiative. It will also help Ghana reach the HIPC completion point by mid-2004."
This, it notes is critical to consolidate progress already made under the 2003-2006 PRGF-supported programme. Though government has not issued an official statement concerning the latest facility, some officials say they are not happy about the tiny flow of the IMF loans.
Ghana has so far received $26.05mand the latest amount is the second in eight months since government signed the deal with the IMF to provide funding for major programmes aimed at reducing poverty.
The facility attracts an interest of 0.5% payable over 10 years.
