The International Monetary Fund (IMF) has projected a more promising economic prospect for Ghana’s economy for the rest of 2017.
According to the fund, the increased oil production, declining inflation, plus other economic indicators are expected to inch Ghana’s economy towards achieving an end of year growth target of about 6 percent.
“Economic prospects in 2017 are encouraging, inflation is declining and prospects are there for a significant increase in the foreign exchange position following significant foreign exchange inflows in recent weeks. The authorities’ initiatives are promising,” the Chief for an IMF visiting team to Ghana, Analisa Fedelino said.
Madam Fedelino added, “More needs to be done to restore macroeconomic stability and confidence. Ambitious fiscal consolidation is needed to bring public debts on a clear declining path, after the sizable fiscal slippages in 2015.”
She made the remarks when her team, together with the Finance Minister, addressed the press on Thursday, April 13th, 2017.
The meeting formed part of the Article IV consultations by the Fund with the coming on board of a new government.
The engagement which is done every year is also to assess each country’s economic health and to forestall future financial problems.
Ghana’s last Article IV consultation by the IMF was carried out in 2014.
The team however cited significant challenges that still hamper the government of Ghana’s macro economic targets.
Key among them was the energy sector debts that continue to accumulate despite efforts by the government to restructure them.
“The commitment in 2016 and weaknesses in the financial positions in the State Owned Enterprises in the utility sector in particular, could undermine fiscal adjustment and add to spending in public debt,”
“The Energy Sector Levies Act (ESLA) has helped banks in restructuring but the debts of the sector continue to grow and these can eventually undermine the efforts in restructuring and require additional efforts,” the team’s Chief observed.
Meanwhile finance Minister, Ken Ofori Atta assured that efforts to increase the government’s revenue and cut down all unnecessary expenditure will avert fiscal slippages as were experienced in the last few years.
“Actions such as the one we carried out on Wednesday [April 12, 2017] to clear ghost names and changes at the GRA and Customs to ensure that we meet the revenue that we need and to ensure that the revenue that we have projected we will get them,” he stressed.
Ghana in 2015 entered into a three year extended credit facility with the IMF for 918 million dollars.
The fund has since disbursed three tranches of the facility to the country.