Economist and Director of Research at the Institute of Economic Affairs (IEA), Dr. John Kwakye, has advised the newly elected President of Ghana, John Dramani Mahama, to conduct a review of the country’s current program with the International Monetary Fund (IMF). Dr. Kwakye asserts that such a review would enhance investor confidence in the Ghanaian cedi and the overall local economy.
In a post on his X account, Dr. Kwakye stated, “To strengthen investor confidence in the cedi and economy, President Mahama should establish a team to review the IMF program. Additionally, President Mahama should form an Economic Advisory Council (EAC) consisting of independent professionals to provide economic counsel.”
This recommendation comes despite the IMF’s recent assessment, which indicated that Ghana has made significant progress in improving its fiscal position ahead of the upcoming general elections on Saturday, December 7. The IMF emphasized that maintaining a consistent fiscal policy, both prior to and following the elections, as well as creating capacity to enhance social programs, is vital for placing public finances on a sustainable trajectory and alleviating financing needs, thereby protecting vulnerable populations from the adverse effects of fiscal adjustments.
The IMF further underscored the necessity for continued efforts to bolster domestic revenue mobilization and refine primary expenditure. These objectives should be supported by advancements in tax administration, improved expenditure control, effective management of arrears, implementation of a strengthened fiscal responsibility framework, and enhanced governance of State-Owned Enterprises (SOEs).
Moreover, the IMF identified the urgent need to address the challenges within the energy sector to mitigate fiscal risks. The authorities are urged to build upon the recent successful Eurobond exchange and to complete their comprehensive debt restructuring expeditiously.
The IMF noted that the authorities have maintained a prudent monetary policy while taking significant measures to rebuild foreign reserve buffers. Moving forward, it is essential to uphold a stringent monetary policy stance in light of potential inflationary pressures and to increase exchange rate flexibility.
This statement was issued following the completion of the third review of Ghana’s 36-month Extended Credit Facility Arrangement by the Executive Board on Monday, December 2, which authorized the immediate disbursement of approximately $360 million (equivalent to SDR 269.1 million).
