Ghana is likely to clear the first review of its $918 million programme with the International Monetary Fund and secure a fresh disbursement of funds aimed at stabilising its economy, sources close to the deal said. The $115 million due in August is vital to shore up a currency that has fallen to record lows and convince investors who have lost faith in the short-term prospects of an economy that until recently was one of the fastest growing in Africa.
The IMF is due to announce today the results of its review of the deal signed in April based on a two-week mission to the capital. Ghana received $114.8 million in balance of payments support in the first tranche of the programme. “Ghana has made progress with specific benchmarks, especially on the fiscal side. Generally, the commitment is there and things are on track,” said one source who declined to be identified.
Improved control over spending, mainly through government reforms put into effect before the programme began, contributed significantly to the current progress, according to one source. Rising global oil prices may have also eased pressure on government finances, said another source. Exports of cocoa, gold and oil helped Ghana’s economy grow strongly for years. But growth has slowed since 2014, as commodity prices fell and the country’s debt-to-GDP ratio rose close to 70 percent.
Two international economists said they expected Ghana to pass early reviews of the programme. They are more concerned about budget projections for the election year of 2016, given how the deficit ballooned in the 2012 election year. Ghana’s currency, the cedi, has fallen 22 percent since January.
It steadied at 4.3600 to the dollar at 1130 GMT on Monday after touching a record low of 4.4100 last week. Deputy Finance Minister Cassiel Ato Forson told Reuters on Monday the government is committed to sustaining the reforms and is hopeful the Fund will disburse the August tranche of money.