Ghana Faces Challenges in Passing IMF Fourth Review Due in April 2025

Ghana is at risk of missing the fourth IMF program review in April 2025 due to unmet performance indicators. Finance Minister Dr. Ato Forson reported significant slippage in key indicators and benchmarks. Experts stress the importance of addressing these issues quickly to avoid negative impact on the economy and recommend initiating talks for an IMF program extension.

Ghana is reportedly at risk of failing to pass the fourth review of its program with the International Monetary Fund (IMF) scheduled for April 2025. This warning comes from Joe Jackson, Chief Executive of Delax Finance, and Vish Ashiagbor, Senior Country Partner at PWC Ghana, following Finance Minister Dr. Ato Forson’s disclosure that key performance indicators have not been met as of December 2024.

Dr. Forson indicated that the country is likely to have missed all structural benchmarks and key indicators necessary for the upcoming review. He emphasized that the inflation rate reached 23.8 percent by December 2024, far exceeding the budget target of 15 percent and significantly above the IMF’s target of 18 percent. Moreover, the primary balance, a crucial fiscal measure, was reported to have deteriorated from a deficit of 0.2 percent of Gross Domestic Product (GDP) in 2023 to a deficit of 3.9 percent in 2024.

Ashiagbor articulated that failure to manage this situation properly may adversely affect the Ghanaian cedi, as investors are already responding negatively to the poor fiscal reports. He urged the government to address these fiscal issues swiftly and adopt innovative solutions. Jackson added that there is increasing pressure on the government to initiate discussions regarding an extension of the IMF program, noting that the inability to meet key targets necessitates prompt action in this regard.

In summary, Ghana’s failure to meet critical IMF program indicators risks jeopardizing its fourth review due in April 2025. The current economic conditions, marked by high inflation and a deteriorating primary balance, highlight the urgent need for the government to take decisive action. Experts advocate for a proactive approach to renegotiate the program terms with the IMF to restore investor confidence and stabilize the economy.

Original Source: www.myjoyonline.com