IMF Board passes Ghana, approves second tranche of bailout

quist

September 1, 2015 8:19 AM

This second approval will see the release of close to $120 million, bringing the total monies disbursed so far under the three-year IMF bailout to $233.1 million.

The IMF Board has approved the second tranche of Ghana's bailout after an assessment of the country's compliance with economic parameters in line with agreed conditions under the bailout.

The Board was in town on Monday to assess how far Ghana was doing in terms of the need to consolidate government expenditure, maintenance or possible reduction of the wage bill, and most important of all, the reduction of the country's debt, which is over GHC90 million.

This second approval will see the release of close to $120 million, bringing the total monies disbursed so far under the three-year IMF bailout to $233.1 million.

The IMF's approval notwithstanding, the Ghanaian government did not meet some of its targets in terms of gross credit to government and accumulation of external arrears. The Executive Board of the IMF granted waivers for the non-adherence to theses performance criteria on grounds of their short-term nature, and the corrective measures being put in place by government to redeem these performance targets.

In the IMF Board's statement, government should firmly continue its expenditure consolidation to fully restore macro economic stability and mitigate financial risk. Government should continue the policy of controlling wage bill by adhering to the net hiring policy, except for the health and education sector, while continuing the payroll cleanup plan.

Government must also continue to adhere to the domestic arrears clearance plan and avoid incurring any arrears, and implement strict measures to achieve expenditure in its statment.

The IMF lauded government for the implementation of a liberalised petroleum downstream pricing regime which has freed government from fuel subsidies.

On the 2016 general elections, the Executive Board of the IMF is charging government to avoid over-spending on the election by getting an early budget for it and efficiently raising funds thereby avoid fiscal over-runs.

Ghana agreed to the three- year program on April 3 2015, involving the disbursement of $918 million to help the country's balance of trade deficit gaps, restore debt sustainability and macroeconomic stability which will get the country back to economic development and employment while protecting social spending.

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