The International Monetary Fund (IMF) has revealed that proposals to renegotiate Ghana’s program must be guided by the fiscal targets of the Extended Credit Facility (ECF).

The IMF noted that leading presidential candidates ahead of the Dec. 7 election “have also promised extensive spending programs, which will need to be carefully implemented to ensure continued compliance with the program’s fiscal targets.”

The concerns were captured in the IMF staff report, which was delivered to its board on 2 December 2024, following discussions with the government at the end of 4 October 2024.

President-elect John Dramani Mahama has already promised to review and adjust Ghana’s existing agreements with development partners such as the IMF and the World Bank to adapt to the country’s current needs and aspirations.

Ghana received about $360 million from the IMF in December 2024 after passing the third review.

Concerns from the IMF come at a time when President-elect John Mahama has indicated he will move to renegotiate Ghana’s program with the IMF and the World Bank.

The IMF staff report was completed on 13 November 2024. However, checks with the IMF have shown that some of the concerns still remain.

However, the IMF noted in its staff report that some of the promises made by these presidential candidates, such as addressing debt risks, increasing employment and addressing high living costs, are consistent with the goals of the current ECF-backed program.

“Ensuring thorough implementation of the program before and after the upcoming elections is of utmost importance and requires strong commitment from all stakeholders,” he said.

Risk to Ghana’s program

In its staff report, the IMF praised the government for the significant progress made under the fund program.

“The authorities have adjusted macroeconomic policy and launched extensive reforms that have affected growth and inflation. There is little room for complacency, as vulnerabilities remain and will require persistence,” the IMF warned.

According to the IMF, a further reduction of the government’s budget deficit is needed by increasing domestic revenues and better controlling public spending.

The IMF also noted that depending on how the political transition is handled, it could affect Ghana’s program going forward.

“Assurances from the main political parties on policy and reform continuity can help mitigate these risks,” he pointed out.

DISCLAIMER: The views, comments, opinions, contributions and statements made by readers and contributors on this platform do not necessarily represent the views or policies of Multimedia Group Limited.