Ken Ofori-Atta and Dr Ernest Addison's letter to the head of the IMF on financial support
As Ghana receives the approval of the IMF Executive Board, let us look at the letter from the Minister of Finance Kenneth Ofori-Atta to the Governor of the Bank of Ghana Dr. Ernest Kwamina Yedu Addison wrote to Kristalina Georgieva, head ofthe IMF for rescue plans.
Below is the letter. Date: May 1,2023
Dear Mrs. Georgieva: After three years of strong and sustained macroeconomic performance, Ghana has major external threats to land during the 2020-22 season.These are emphasized weak and put the economy in trouble. In particular, the two effects of the COVID-19 pandemic and the war in Ukraine have significantly reduced public funding and aid. and the rapid and steep rise in inflation. These tremors werealso aggravated to close the financial situation both in the world and in the region, which has been damaged efforts to obtain financial support and debt. These developments eventually led to loss of access to international markets and increasing difficulties in adapting public debt instrument, thus causing a negative feedback loop of reduction keep, the decline of the Cedi, the rise of inflation and the fall of investor confidence, make us non-sustainable public debt.
Faced with this difficult situation, we have created a strong program to restore macroeconomic stability and setthe stage for stronger and more inclusive growth. Main location The objective of the post-Covid-19 economic growth program (PC-PEG) is to see financial support while protecting the most vulnerable, increasing the reliability of the financial policy and Reform policies to reduce inflation and rebuild external reserves, protecting thefinancial sector Stay strong and take uniquesteps to promote business and personal investment (domestic and FDI) to establish an export-oriented economy and accelerate growth as a A strong platform for the AfCFTA, where you see progress in the government and understanding of public institutions.
We have done many important things in the process of PC-PEG. Parliament has approved the 2023 budget that revised our projected budget summation program, including through a limited amount of income. And we started and now implement a globaldebt service, which, along with our budget program, reinvest public funds and debt in a sustainable manner. We have taken steps to strengthen expense commitment management. We have raised the price of electricity, an important step towards this Comprehensive Debt Relief Scheme, with the aim ofreducing the deficit of the power sector and ensure the financial strength of the energy sector. Governmentand Bank of Ghana have signed a memorandum of understanding (MOU) to stop financial aid to help reduce inflation. The Bank of Ghana has also strengthened its monetary policy stance in recent years. month and determined to maintain the appropriate policy to help control inflation return to the semi-target orderof 8 2%. As part of our efforts to improve the understanding of public sector budgets andaccountability, the Author has prepared and published report on costs related to COVID-19.
To support our goals, we would like to apply for the 36 montharrangement below Extended Credit Facility (ECF), with access to 304% of our SDR quota (2.242 billion SDRs) and it will be given as budget support. With support from development partners and funding Thank you for the comprehensive debt restructuring that was introduced, which The financial agreement will cover our fiscal and external gaps as we embark on a multi-year reform effort. We agree tothe policies and practices described in the attached Memorandum of Understanding The Economic and Financial Policy (MEFP) approved by PC-PEG will help us achieve ours program goals. The proposed structure will be evaluatedthrough the process of Quantitative performance criteria and indicator objectives. It also includes the original schedule and regulatory frameworks that cover areas of change necessary to support economic growth performance and continuous performance criteria related to financial constraints and multiples financial practices in relation toArticle VIII. The government is committed to providing and IMF information on the implementation of agreed measures in the implementation of program, as provided in the Technical Memorandum of Understanding (TMU). If othermeasures are necessary, we will first ask the IMF about them Adoption, according to IMF policies. We are committed to working with them IMF officials to ensure the success of the program, we will provide the IMF with important information important information to trackour progress. We fully understand the importance of conducting new security research which Bank of Ghana before completing the initial review under the ECF. IMF information still The security assessment took place from March to April2023. Bank of Ghana provide IMF staff with all necessary information to prepare for this mission.
In keeping with our commitment to open government services, we agree Publication of all documents submitted to the Executive Board of the IMF in connection with this asked. Sincerely,
/s/ Kenneth Ofori-Atta Minister of Finance /s/ Ernest Kwamina Yedu Addison Governor, Bank of Ghana Author: Secretary to the President, Jubilee House, Accra
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