Ghana may not pass the upcoming IMF review due to missed performance indicators, as indicated by recent statements from the finance minister and financial experts. Key issues include failing to meet inflationary targets and a worsening fiscal deficit. Urgent governmental actions are necessary to regain investor confidence and adhere to IMF requirements before the April 2025 review.
Ghana faces potential difficulties in passing the upcoming fourth review of its International Monetary Fund (IMF) program scheduled for April 2025. Joe Jackson, Chief Executive of Delax Finance, and Vish Ashiagbor, Senior Country Partner at PWC Ghana, have expressed concerns over Ghana missing critical performance indicators outlined by the IMF. With no waivers granted for missed targets, the likelihood of failing this review increases significantly.
Finance Minister Dr. Cassiel Ato Forson highlighted in a recent parliamentary budget presentation that Ghana has fallen short of meeting key performance indicators for the IMF review. He pointed out that the country has likely missed all structural benchmarks, indicating serious issues in fulfilling reform commitments as required by the IMF.
The Minister disclosed that inflation at the end of 2024 stood at 23.8%, far exceeding the target of 15% and the IMF’s target of 18%. This failure has raised concerns regarding the government’s fiscal management capacity. Additionally, the primary balance shifted from a slight surplus to a significant deficit, marking a deterioration from a -0.2% of GDP to -3.9% in just one year, signaling a breakdown of fiscal discipline.
Mr. Ashiagbor noted that these fiscal issues are prompting negative reactions from investors and could further weaken the Ghana cedi if not addressed effectively. He emphasized the urgency for the government to implement corrective measures to stabilize economic conditions.
Furthermore, Jackson urged the government to initiate talks for an IMF program extension, citing that future negotiating leverage diminishes as GDP targets remain unmet. The current scenario demands decisive actions to safeguard Ghana’s financial standing and ensure compliance with the IMF’s expectations.
Ghana risks failing its fourth IMF review due to missed performance indicators and a significant fiscal deficit. The finance minister’s disclosures underline substantial failures in meeting set targets, particularly regarding inflation and budget management. Experts are advocating for urgent governmental action to stabilize the economy and prepare for potential negotiations with the IMF regarding program extensions. Without immediate intervention, investor confidence could further decline, jeopardizing the nation’s economic recovery.
Original Source: www.myjoyonline.com
