International Monetary Fund (IMF) Managing Director Christine Lagarde talks at a news conference at the 2015 IMF/World Bank Annual Meetings in Lima, Peru, October 9, 2015. REUTERS/Mariana Bazo

The Managing Director of the International Monetary Fund (IMF), Ms Christine Lagarde, has observed that the Ghanaian economy is in a better place than it was two years ago.
She said the IMF-supported programme had been an anchor for orderly economic adjustment and a positive signal to the market.

During that period, Ms Lagarde said, the Ghanaian authorities had made important gains towards macroeconomic stability, including inflation, which had declined to a single digit and now within the Bank of Ghana’s (BoG’s) tolerance band; buoyant growth, averaging about five per cent between 2015 and 2018 (and over six per cent in 2017-18) and a primary surplus in 2017 for the first time in 15 years.

In an email response to the Daily Graphic’s questions ahead of her maiden visit to Ghana yesterday, Ms Lagarde said the programme, which ends this December, served as “an anchor for orderly economic adjustment and a positive signal to the market”.

She underscored the need for Ghana “to preserve those gains” for the progress of the country and the citizens in particular.

The IMF, founded in 1945, is a global body of 189-member countries, including Ghana.

The IMF’s Extended Credit Facility (ECF) provides financial assistance for countries with protracted balance of payment problems.

In 2015, the Ghana government entered into an agreement with the IMF for economic assistance.

The deal concluded with a funding support of $918 million to be disbursed to Ghana under eight tranches.

Some key issues of the credit facility included the freezing of public sector employment, reducing the budget deficit and zero financing of the budget deficit by the BoG.

Ms Lagarde is due to open a regional conference on the “Future of Work in sub-Saharan Africa (SSA)” in Accra today December 17,2018.

Her visit comes at a time ECF programme, signed in 2015, is nearing its completion.

The government has already announced its decision to exit on completion, after extending it by some six months.

Ms Lagarde said being under the IMF provided the anchor for orderly economic adjustment and that sent a positive signal to the market.
Although Ghana planned to exit the programme, she said, it was important to continue on that positive pedestal.

Although the country has undertaken several structural reforms under the IMF programme, the pace has been slower and, according to Ms Lagarde, challenges still persisted.

Ghana has undertaken several important structural reforms, including adopting a Public Financial Management Act, improving debt management and strengthening the banking sector, including through the resolution of insolvent institutions.

“At the same time, a number of challenges still have to be tackled, including a large debt stock, low revenue base, large non-performing loans, fragilities in the financial sector and a still relatively low level of foreign exchange reserves.

“Important gains towards macroeconomic stability have been achieved and should be preserved through the implementation of responsible macroeconomic policies and structural reforms. These will take time, and the authorities have expressed a commitment to continue to pursue them,” she explained.

She also added that the IMF would continue to have regular policy dialogues with Ghana through annual discussions in the context of Article IV consultations.

The IMF, she said, remained committed to supporting Ghana’s development strategy and contributing to capacity development, which had been facilitated by its technical assistance centre located in Accra.