The International Monetary Fund (IMF) has cautioned the Ghanaian government to strictly restrict borrowing on non-concessional terms and ensure timely debt payments.
The Fund also suggested that the authorities should formulate and disclose a medium-term debt management strategy and an annual borrowing plan following the completion of external debt restructuring.
In its 2023 Article IV Consultation, the IMF acknowledged the government’s commitment to the fiscal objectives of the program and its readiness to implement contingency measures if necessary.
“Specifically, on the revenue side, some of the measures identified in our MTRS could be brought forward in case of unexpected underperformance,” the IMF added.
On the spending side, the IMF noted that the budget allocations for Ministries, Departments, and Agencies (MDAs) would be reduced during the year if necessary.
Despite expressing concerns, the IMF acknowledged that Ghana’s program has remained on track, with all indicative targets being met.
“All quantitative performance criteria for the first review and almost all indicative targets and structural benchmarks were met”.
The staff report added that Ghana is on track to reduce the fiscal primary deficit on a commitment basis by approximately 4 percentage points of Gross Domestic Product in 2023, aligning with the authorities’ commitments under the Fund-supported program.
It further stated that spending has remained within program limits, and on the revenue side, Ghana has achieved its non-oil revenue mobilization target.
It said sound policies and reforms should foster recovery and further reduce inflation over the medium term, adding, “downside risks include slippages in programme execution, delays in restructuring debt, and a deterioration in the external environment.”
“The authorities have reoriented their macroeconomic policies, made progress in restructuring their debt, and initiated wide-ranging reforms,” the IMF concluded.