The International Monetary Fund (IMF) has issued a warning to Ghana regarding the fragile nature of its economic progress under the Extended Credit Facility (ECF) programme. While acknowledging the strides made to stabilize the country’s economy, the IMF emphasized the need for sustained reforms to address fiscal challenges and safeguard against potential setbacks.
Ghana, under the ECF programme, has been working to restore macroeconomic stability and implement reforms to combat its debt vulnerabilities. However, the IMF highlighted that these gains remain vulnerable to external shocks, delays in policy execution, and structural inefficiencies. The warning serves as a reminder that the country’s economic recovery process is far from complete and requires a steadfast commitment to reforms.
Fragile Gains Amid Economic Challenges
In its latest report on Ghana, the IMF underscored the importance of maintaining fiscal discipline and boosting revenue mobilization to consolidate the economic recovery. The Fund also urged the timely execution of reforms, which are critical to addressing structural weaknesses and mitigating the impact of external pressures.
“Encouraging continued financial system recapitalization and tackling legacy issues in the financial sector remain important,” the report noted. It further stressed that reducing inflation and rebuilding international reserves depend on maintaining a tight monetary policy stance and improving foreign exchange market operations. These measures, the IMF stated, are vital to fostering economic resilience.
Beyond macroeconomic adjustments, the IMF highlighted the importance of safeguarding the most vulnerable populations from the adverse effects of reforms. Ensuring inclusivity in the recovery process, it said, will be key to achieving long-term stability and economic growth.
Risks to Economic Stability
Despite some progress, the IMF raised concerns about delays in securing funding from key donor programmes, including the World Bank. Such delays, coupled with political gridlock, have the potential to derail the country’s reform agenda. Parliamentary disagreements, particularly in the context of the upcoming December 2024 general elections, have slowed the approval of crucial reforms needed to unlock access to donor funds.
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