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A team from the International Monetary Fund (IMF) has lauded Ghana for its transformational and economic development programmes, saying macroeconomic stabilization is ongoing, with growth prospects remaining positive, supported by strong oil production.

According to the team, in an official report, investor confidence has also improved, as indicated by a successful issuance of the Eurobond in May 2018, adding that inflation has subsided to below 10 percent.

The report noted that government has further stepped up structural reforms, particularly on public financial management and strengthening oversight over SOEs, adding that such a package should be able to meet the fiscal objectives and support the implementation of the government's development agenda.

“The government’s commitment to achieving the end-year fiscal targets is encouraging. Available fiscal data suggest an increase in government spending—mainly due to frontloading of capital spending and goods and services—while revenue underperformed in the first four months of the year. Thus, we welcome the government’s intention to present a balanced and comprehensive fiscal package to Parliament at the time of the mid-year budget review in July. Such a package would help meet the fiscal objectives and support the implementation the government’s development agenda.

According to the IMF, the monetary policy stance remains appropriate and inflation is expected to continue to decline to the 8 percent target before the end of the year. It added that responding to the gradual lowering of the monetary policy rate, lending rates have also been inching down.

The IMF also hopes that recent exchange rate pressures are expected to be short-lived, provided that fiscal consolidation continues, urging government that a key priority is to strengthen foreign exchange (FX) management to help foster a deeper and more liquid FX market.

“Strengthening the resilience of the financial sector would improve medium-term prospects for economic growth. The overall financial system is adequately capitalized, but weaknesses in some institutions—including high levels of nonperforming loans—can adversely impact financial stability, hamper credit growth and investment, and create contingent liabilities for the government. The Bank of Ghana (BoG) is introducing reform measures to address remaining financial sector weaknesses which would help improve the availability and affordability of credit to the private sector.

The IMF also welcomed the government’s efforts to strengthen SOE governance. Improving the financial position of the loss-making SOEs is essential for mitigating fiscal risks, saying it support the authorities’ decision to create a single entity to oversee the SOEs and submit a draft bill to Parliament by end-July 2018.

It also intimated that the approval of financial recovery plans for the energy sector SOEs is essential to put them on the path of financial recovery, pointing out that it is equally important to sustain efforts at pushing through the ECG concession, while government develops a strategy for divesting the non-core assets of the Volta River Authority.

The IMF mission met with Vice President Mahamudu Bawumia; Finance Minister Hon. Ken Ofori-Atta; First and Second Deputy Governors of the BoG Maxwell Opoku-Afari and Elsie Addo Awadzi, and other senior officials, describing such interactions as constructive.  Led by Annalisa Fedelino, the team visited Accra from June 20-26, 2018, to discuss recent economic developments and the outlook for the remainder of the year and take stock of performance to date under the IMF-supported programme.

Official reports indicate that discussions focused on fiscal and monetary policies, prospects for deepening the foreign exchange market, the outlook for strengthening the financial sector, and state-owned enterprises (SOEs) in delivering on the programmes between Ghana and development partners.

While here, the IMF team also participated in the African Transformation Forum and visited the Cocoa Research Institute of Ghana to familiarise themselves with trends in Ghana's moves and initiatives in improving the cocoa sector, particularly processing, as part of the nation's industrialisation programme in creating more jobs and expanding the economy.