The International Monetary Fund (IMF) has said Ghana’s current economic challenges will require extra measures from government to put it back on track.
The Director of African Department of the IMF, Antoinette Sayeh speaking at a press conference at and IMF and World Bank meeting said, Ghana’s government is working hard to meet the terms for the program.
“The situation in Ghana is indeed difficult, as the government recognizes. The government put forward a demand to the IMF for a fund program back in August. We’ve been working since then to of course be responsive to that request. And we’ve just heard a mission come back from Accra in the first set of discussions toward a possible fund supported program,” Antoinette Sayeh said.
Ghana just completed the first round of negotiations for the terms of a possible bailout with IMF last month.
The government applied to the IMF to help it deal with the huge budget deficit, heightened inflation, huge wage bill and public debt in August.
[contextly_sidebar id=”VZSzP798jhYbFJ7z756dnDjlYwYqiWSG”]“The authorities in Ghana fully recognize that additional efforts are needed on the fiscal side to achieve the targets that they’ve set for themselves, the deficit target for this year. They are in the process of further refining the those actions they intend to take and in making sure that the consensus they need to follow through with those actions are there” she added.
Sayeh also said, though Ghana’s situation is difficult, it can be resolved with a bailout.
“We certainly hope to be helpful to them with the program, but that needs to further discuss, of course, whether all of the actions that need to be taken are laid that we are in the position to then propose a program to our board.”
The IMF has also rubbished macroeconomic targets and projections from the bank of Ghana and the government.
The IMF’s analysis indicates Ghana cannot achieve single digit inflation next year and growth targets overly ambitious. The fund’s findings are revealed in the latest World Economic outlook report titled “legacies, clouds, uncertainties”.
The World Economic Outlook report provides estimates of how economies are expected to perform in the short to medium term.
The IMF in the report says Ghana quest to attain a single digit inflation next year may just be a mirage.
Deputy Governor of the bank of Ghana, Millison Narh in the September told the public accounts committee that the central bank expects the country to return to single digit in the second half of 2015.
The International Monetary Fund says considering the state of Ghanaian economy single digit inflation may only be achieved in the next 5 years.
Though some analysts are predicting inflation which is currently 15.9pecercent could decline considering the harvest season, the report says otherwise.
The IMF says inflation is expected to rise further this year and end at a rate of 18.5%.
It also indicates inflation will average 16.8 percent in 2015 and decline to about 15.1% by the end of the next year.
If these projections are anything to go by, it will mean the average prices of goods and services are expected to rise significantly in the coming months. This will also put some pressure on the cedi to depreciate.
With reference to growth of the economy, Finance Minister Seth Tekpe in the mid year review of the economy said GDP is expected to grow at about 7.1% this year.
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By: Nana Ama Agyemang Asante/citifmonline.com/Ghana