President John Dramani Mahama has reaffirmed the government’s commitment to successfully complete the International Monetary Fund (IMF) programme. He said the government had no intention of quitting the three-year Extended Credit Facility (ECF) programme, especially when the consolidation and reviews were on course.
President Mahama gave the assurance when he paid a courtesy call on the Asantehene, Otumfuo Osei Tutu II, at the Manhyia Palace yesterday as part of his “Accounting to the people” tour of the Ashanti Region.
He stated the same position at the inauguration of two community day senior high schools at Adebewora in the Atwima Mponua District and Adugyama in the Ahafo Ano South District in the region.
The President urged the IMF to work expeditiously with the Ghanaian authorities to take the third review report to the IMF Board, given its implications for Ghana’s international market activities, including the refinancing of the sovereign bond that was issued in 2007. He said the government was very conscious of the fact that 2016 was an election year when it decided on the three-year programme that would end in 2017. He made particular reference to requirements necessary for the completion of the third review of the programme and its targets, saying they would not be compromised in this election year.
To expedite action towards the ultimate completion of the third review, he said he had given Executive approval for both the Public Financing Management (PFM) Bill and the Amended Bank of Ghana Act.
Following the approval, he said, the PFM Bill was submitted to Parliament on June 25, this year, while the Amended Bank of Ghana Act was expected to be submitted to Parliament on Tuesday, June 28. He said the government remained optimistic about the programme and would ensure that all programme reviews were successfully completed through to 2017 in view of the enormous benefits to the economy.
Minister buttresses position
The Minister of Finance, Mr Seth Terkper, had earlier buttressed the President’s position when he told the Daily Graphic that statements that seemed to suggest that Ghana could quit the programme in an election year were unfounded. In April 2015, the IMF Executive Board approved Ghana’s request for a three-year ECF programme with access amount of about US$940 million or 180 per cent of Ghana’s IMF quota. The approved programme is consistent with the government’s policy measures contained in its home-grown policies that were developed in early 2014 and which were anchored on the Ghana Shared Growth and Development Agenda (GSGDA, II), Ghana’s medium-term development strategy.
Mr Terkper said in spite of a difficult global and domestic environment with regard to crude oil price decline and energy challenges, significant progress had been made in implementing the objectives of the programme, culminating in two successful reviews.
“This showed achievements in almost all quantitative performance criteria and structural benchmarks under the programme, following the approval of the programme a year ago. All of these are indications of the government’s strong commitment and resolve to the programme, as well as the attainment of macroeconomic stability for stronger and sustainable growth,” he said.
He said in the view of the government, the third review of performance under the programme was successfully concluded at staff level in May 2016 following extensive discussions with a mission on the implementation of the programme. He added that the medium-term outlook and policies that were needed to restore debt sustainability and a return to high growth and job creation, while protecting the poor, were on course.
Third review mission After the third review mission, the IMF staff issued a press statement highlighting the fact that implementation of the programme objectives remained broadly satisfactory, as most end-December 2015 performance criteria were met, in spite of the more difficult global and domestic environment.
“Originally, we expected the IMF Executive Board to review and approve Ghana’s economic performance under the third review in June 2016. However, we have been made to understand that this step will be taken as soon as a number of new prior actions which are conditions to be met before the IMF Board meets to approve the review introduced by the IMF after the Mission in May 2016 are satisfied,” the minister said.
Some of the new prior actions include approval of the PFM Law by Parliament, approval of the amended Bank of Ghana Act by Parliament, a strategy to address the debt and financial situation of state-owned enterprises, completion of an exercise on the reclassification of government accounts for the production of consistent and reconciled fiscal accounts for 2015, completion of work on the strategy for banks’ recapitalisation and approval of the Banks and Specialised Deposit-taking Institutions Law by Parliament.
The minister said to expedite action towards the ultimate completion of the third review by satisfying the new prior actions, some actions had been taken. Among them, he said, was a draft of the strategy to address the debt and financial situation of SOEs which had already been submitted to the IMF. He said following that, the Fund had requested for more detailed data on the SOEs, as well as their financial projections.
He also indicated that significant progress had been made to complete the exercise on the Government Account Reclassification and was expected to be completed in the coming days.
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