IMF to support Ghana’s re-entry to international capital markets – Finance Minister
Minister for Finance, Ken Ofori-Atta, has remarked that a Balance of Payment (BoP) Support Programme from the IMF will help the country’s re-entry into the international capital markets.
The Finance Minister made the assertion during the presentation of the 2022 Mid-Year Budget Review on the floor of Parliament on Monday, July 25, 2022.
According to the Finance Minister, the IMF bailout programme will chart a sustainable course that will restore and improve macroeconomic stability, energise and expand economic activity, create jobs and strengthen Ghana’s structural resilience to future external shocks.
Ghana on July 1, 2022, requested for a bailout programme from the IMF.
The request for the bailout programme comes on the back of rising unsustainable public debt stock, high fiscal deficit, low domestic revenue mobilisation, record high inflation rate, declining foreign reserves among others.
Per report, Ghana is seeking some $1.5bn in financial assistance from the Bretton Wood Institution.
Touching on the IMF BoP support programme during the announcement of its policy rate on Monday, July 25, Governor of the Central Bank, Dr Ernest Addison remarked the he expects the government’s IMF supported programme to restore and anchor price stability and prevent further increments in inflation.
“The Bank of Ghana has responded decisively with its policy tools over the last few months increasing the policy rate by a cumulative 550 basis points since November 2021 and tightened liquidity conditions. The Committee also noted the deceleration in the rate of increase in inflation in the last reading.
“The Committee expects that the macroeconomic framework that will underpin an agreed IMF supported programme will present a stronger coordinated monetary and fiscal policy framework that will anchor stability and prevent a wage-price spiral, which will lead to inflation becoming more entrenched.
“Based on the above assessments, the Committee was of the view that it will be appropriate to pause and observe the impact of the recent monetary policy measures already taken The Committee therefore decided to maintain the monetary policy rate at 19.0 percent,” Dr Addison remarked.
