Economists skeptical of Ghana’s May 17 deadline for IMF board approval
Ghana’s quest for approval of the International Monetary Fund (IMF) support program and the subsequent disbursement of the first tranche of the $3 billion Balance of Payment support has attracted attention from economists and financial experts.
The timeline for these processes has come under scrutiny, with some expressing doubts about the feasibility of meeting the proposed deadline.
The government has indicated that Ghana may receive board approval by Wednesday, May 17, 2023. However, there are dissenting voices among economists, who argue that the approval process typically involves various stages and may take longer than anticipated.
They point out that after receiving all relevant financing assurances, the IMF Board needs to review and approve the financing agreement, a process that can involve substantial documentation and internal deliberations.
One notable figure questioning the timeline is Dr. John Kwakye, the Director of Research at the Institute of Economic Affairs. Dr. Kwakye, drawing on his experience and familiarity with the IMF Board Meeting Schedule, has raised concerns about Ghana’s absence from the agenda for the upcoming weeks.
In a tweet, he called on policymakers to share the IMF Board Meeting Schedule if they possess it, implying that the proposed approval date may not align with the actual schedule.
Bright Simons, Vice President of Imani Africa, adds to the skepticism surrounding the timeline. He highlights that the completion of relevant documentation and the subsequent submission to the board for approval typically take between two weeks and one month.
This indicates that the government’s expectation of a rapid approval may not align with the standard procedures observed by the IMF. Simons also emphasizes the discrepancy between Ghana’s desired disbursement amount of $600 million and the IMF’s historical risk-based tranche disbursement model, which suggests a lower range of $300 million to $450 million. This further complicates the situation and raises questions about the government’s stance.
The timeline for Ghana’s IMF support program approval and the associated disbursement of funds has raised concerns among economists and financial experts. The doubts expressed by Dr. John Kwakye and Bright Simons, indicate the need for a more realistic assessment of the approval process and the expectations regarding the timeline.
