Monetary policy

Metascholar News Portal
Continent , Economy , Local News
April 23, 2025
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5 minutes Read

IMF Reports Setbacks in Ghana Programme Amid Pre-2024 Election Challenges Despite Economic Growth

The International Monetary Fund (IMF) has acknowledged Ghana’s stronger-than-anticipated economic growth in 2024, largely driven by robust performance in the mining and construction sectors. However, despite these positive developments, the Fund has raised concerns over fiscal slippages and delays in critical reforms, particularly in the lead-up to Ghana’s 2024 general elections. According to a statement released by the IMF following a mission to Accra, the external sector also showed significant improvement during 2024, supported by solid export performance especially in gold, and to a lesser extent, oil as well as an increase in remittances. These factors contributed to a substantial accumulation of international reserves, surpassing targets set under Ghana’s Extended Credit Facility (ECF)-supported program. An IMF staff team, led by Mr. Stéphane Roudet, Mission Chief for Ghana, conducted discussions with Ghanaian authorities from April 2 to April 15, 2025, as part of the fourth review of Ghana’s three-year arrangement under the ECF. This program, initially approved by the IMF Executive Board on May 17, 2023, allocated a total of SDR 2.242 billion (approximately US$3 billion) to support Ghana’s economic stabilization and reform efforts amid ongoing fiscal and debt challenges. At the conclusion of the mission, Mr. Roudet confirmed that IMF staff and the Government of Ghana had reached a staff-level agreement regarding the fourth review of the economic program. This agreement, however, remains subject to approval by the IMF Executive Board. Once approved, Ghana would gain access to an additional SDR 267.5 million (about US$370 million), bringing total disbursements under the program to SDR 1,708 million (approximately US$2.355 billion) since its inception. While commending Ghana for exceeding growth expectations and strengthening its external sector, the IMF expressed concern over a marked deterioration in overall program performance by the end of 2024. Preliminary fiscal data revealed significant slippages, notably due to a large accumulation of unpaid obligations in the months preceding the elections. Inflation also surpassed program targets, and key reforms in fiscal management, the financial sector, and the energy sector experienced delays. In response to these setbacks, Ghana’s new authorities have initiated corrective measures aimed at restoring fiscal discipline and ensuring that the broader objectives of the ECF-supported program remain achievable. Among these measures is a comprehensive audit of outstanding payables to assess the extent of fiscal slippages. Preliminary findings indicate that the primary balance recorded a deficit of approximately 3.25% of GDP, diverging sharply from the targeted surplus of 0.5% of GDP. To address this fiscal gap, the…

Metascholar News Portal
Business , Economy , News
December 29, 2024
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2 minutes Read

Ghana Targets Single-Digit Inflation by quarter one 2026

Ghana is forecasted to achieve single-digit inflation by the first quarter of 2026, according to IC Research. This projection reflects a revised timeline due to challenges like persistent inflationary pressures, volatile forex conditions, and uncertainties in global policy impacting food and energy prices. Despite these hurdles, there are optimistic signs, including the recent stabilization of the Ghanaian cedi, which is expected to ease inflationary pressures. The path to this milestone has been marked by significant policy interventions. The Bank of Ghana has implemented strict monetary policies to manage liquidity and curb inflationary trends. These measures are crucial as inflation remains high, driven largely by increasing food prices and energy costs. Recent data indicates that food inflation continues to contribute significantly to the overall rate, highlighting the need for targeted strategies to address this sector. A key factor influencing inflation trends has been the exchange rate of the cedi against major foreign currencies. The cedi’s appreciation in recent months offers some relief, as a stronger currency reduces the cost of imports, including essential goods. This development is expected to complement existing efforts to stabilize prices and encourage economic growth. While Ghana’s return to single-digit inflation signals progress, it also underscores the need for sustained policy coordination and external support. The government must balance addressing structural challenges with fostering economic resilience. Factors such as global commodity prices, energy supply issues, and domestic productivity will play a critical role in determining the timeline for achieving and maintaining this target. Looking forward, economic analysts emphasize the importance of comprehensive strategies to mitigate inflationary risks and bolster confidence in the economy. Investments in agriculture and energy, alongside measures to improve productivity, will be crucial in ensuring that the country stays on track toward its goal. With its commitment to macroeconomic stability and growth, Ghana’s journey toward single-digit inflation could mark a significant turning point for its economy, providing a foundation for sustainable development. The achievement of this target by 2026 will also reinforce the government’s credibility in managing economic challenges and meeting long-term objectives.