Ghana: Implementation of a policy to reduce the budget deficit
Ghana is on track to reduce its primary budget deficit on a commitment basis to around 4% of GDP by 2023. This is what the International Monetary Fund said in a press release published on Friday 7 October.
During a 2-week mission to Accra as part of the first review of the agreement under the Extended Credit Facility (ECF), the IMF considers that the results achieved in relation to the programme objectives and the reforms implemented by the Ghanaian authorities are convincing.
«In order to mitigate the impact of the crisis on the most vulnerable populations, the authorities have considerably expanded social protection programmes. On the revenue side, Ghana has met its non-oil revenue mobilisation target» said the IMF.
As a reminder, Ghana is taking action to restructure its public debt. Faced with a serious economic crisis following the slowdown caused by the coronavirus pandemic and the fallout from the war in Ukraine, Accra was forced in December 2022 to temporarily suspend payment of most of its external debt, which was siphoning off around 70% of public revenue.
At the end of the mission, the Ghanaian authorities and IMF staff reached an agreement in principle to disburse $600 million under the ECF. This three-year $3 billion agreement, approved in May 2023, is designed to support the reforms planned by the Ghanaian government as part of the post-Covid-19 economic growth programme (PC-PEG).
This programme aims to restore macroeconomic stability and debt sustainability. The Board’s approval will bring the total amount disbursed by the IMF under the arrangement to $1.2 billion. The Fund calls on Ghana to reach early agreement with official creditors on the terms for debt treatment within the parameters of the programme, so that the review can be completed on schedule.
