This is after the IMF’s first assessment of the state of the economy after Ghana completed the 4-year bailout programme.
According to the IMF, the favorable economic outlook is supported by the strong performance of the country’s extractive sector and a safer banking system which is due to the Bank of Ghana’s sector clean-up.
In a statement issued by an IMF Mission which came to Ghana to analyse the performance of the economy as part of the Fund’s Article IV programme conducted on member countries.
The team was led by Carlo Sdralevich. They held discussions with government officials such as Vice President Dr Mahamudu Bawumia, Finance Minister; Ken Ofori-Atta, BoG Governor, Dr. Ernest Addison; among other officials.
Carlo Sdralevich said Ghana has implemented good policies and maintained macroeconomic stability after completing the bailout.
However, the Fund indicated that the implementation of the 2019 budget has been challenging due to lower than expected revenues, frontloading of spending on some government flagship programs, and unexpected security outlays reflecting emerging security challenges from the Sahel region.
The IMF expressed concerns overtake or pay agreements which have led to the government spending more than US$200 million on power supplied by independent power producers it does not consume.
“While 2020 budget preparations are ongoing, the mission underlined the need to adopt an appropriately tight budget to limit financing needs, contain debt build-up, and support the external position. This will likely require both spending and revenue measures,” the IMF said.
“In the medium term, raising domestic revenues remains a priority to create fiscal space and buttress fiscal sustainability. The authorities should also forge ahead with the implementation of the Energy Sector Recovery Plan to limit contingent liabilities in the energy sector,” the Fund added.