Ghana risks failing the fourth IMF program review set for April 2025 due to missed key indicators, as reported by Finance Minister Dr. Ato Forson. Experts Joe Jackson and Vish Ashiagbor emphasize the need for immediate governmental action to mitigate negative impacts on the economy and the cedi, urging discussions for an IMF program extension.
Recent statements from key financial experts suggest that Ghana may not successfully pass the fourth review of its International Monetary Fund (IMF) program due in April 2025. Joe Jackson, Chief Executive of Delax Finance, and Vish Ashiagbor, Senior Country Partner at PWC Ghana, expressed concerns regarding Ghana’s performance against several crucial indicators by the end of December 2024. The Finance Minister, Dr. Ato Forson, confirmed that these indicators were not met, placing Ghana’s compliance at risk.
In a presentation to Parliament, Dr. Ato Forson highlighted that all structural benchmarks due by the end of December 2024 were likely missed, reflecting a failure to adhere to reform commitments. The Minister specifically noted that inflation rates exceeded targets, with a recorded inflation of 23.8 percent against a budget target of 15 percent and an IMF target of 18 percent, illustrating significant economic distress.
Additionally, the primary balance, a critical component of the IMF fiscal program, worsened from a deficit of 0.2 percent of GDP in 2023 to an alarming 3.9 percent in 2024. This substantial negative deviation from the targeted surplus illustrates serious concerns about Ghana’s fiscal management at a pivotal time.
Ashiagbor further cautioned that improper management of these economic challenges could adversely affect the Ghana cedi, citing that investors have begun responding negatively to the country’s fiscal data. Both experts urged the government to take immediate and innovative action to remedy the situation and consider negotiating for an extension of the IMF program, acknowledging the current failure to meet critical targets.
In summary, Ghana is faced with significant challenges in meeting the IMF program review criteria set for April 2025. Failure to comply with key financial indicators jeopardizes not only the review outcome but also impacts investor confidence and the overall economy. Prompt government action is essential to address these issues and to explore avenues for extending the IMF program.
Original Source: www.myjoyonline.com
