The International Monetary Fund (IMF) has commenced discussions with the Ghanaian government on the state of the economy and the 2025 Budget.
The engagement, which began on February 10, 2025, will focus on assessing the country’s economic performance, revenue mobilization strategies, and plans to manage debt sustainability. This visit, spanning five days, is not a formal review mission but rather an opportunity for the IMF to engage with government officials on critical fiscal and economic issues.
The discussions will center on Ghana’s economic trajectory and how the 2025 Budget aligns with the objectives of the IMF-supported programme. The government is expected to present the budget to Parliament in March 2025, and the IMF team will assess whether it is consistent with Ghana’s commitments under the programme.
One key area of discussion will be revenue mobilization, as Ghana continues to explore ways to increase domestic revenue while reducing reliance on external borrowing. The government’s plans to abolish certain taxes, including the Betting Tax, Covid-19 Levy, and E-Levy, are expected to be a major point of debate. Analysts estimate that the removal of these taxes could result in an annual revenue loss of approximately 10 billion cedis. The IMF team will seek clarity on how the government intends to fill this revenue gap and maintain fiscal discipline.
Another crucial issue on the agenda is Ghana’s negotiations with external commercial creditors. As part of its debt restructuring efforts, the government has been engaging lenders to secure more favorable repayment terms. The IMF will assess the progress of these negotiations and their potential impact on the broader economic recovery efforts.
Additionally, discussions will cover the energy sector, particularly government plans to address the sector’s financial challenges. The IMF will seek clarity on the proposed privatization of parts of the Electricity Company of Ghana’s (ECG) operations, a move seen as a step toward improving efficiency and reducing financial losses in the sector.
Programme Extension and Additional IMF Funding
Finance Minister Dr. Ato Forson recently indicated that the government is considering an extension of the IMF-supported programme. This proposal will be a key part of the discussions, as Ghana explores avenues to secure additional funding to stabilize the economy. While the IMF has expressed openness to reviewing the programme, any extension or new funding arrangement must align with the Fund’s broader objectives, including fiscal consolidation and sustainable debt management.
Since Ghana entered into the IMF programme in May 2023, the country has received approximately $1.9 billion in financial support. The third review of the programme, which was completed in late 2024, showed satisfactory progress, particularly in debt restructuring, inflation control, and economic growth. The IMF noted that economic performance in the first half of 2024 exceeded expectations, with inflation on a steady decline and fiscal and external positions improving.
Ghana’s economic outlook remains a critical concern for both the government and the IMF. While growth indicators have shown positive trends, challenges persist, particularly in the areas of revenue generation, debt servicing, and foreign exchange stability. The IMF team will evaluate the government’s strategies for resetting the economy and ensuring long-term macroeconomic stability.
The discussions will also explore policies aimed at enhancing investor confidence and boosting productivity in key sectors. The government’s ability to strike a balance between economic expansion and fiscal discipline will be crucial in maintaining Ghana’s credibility with international financial institutions and investors.
The ongoing discussions between the government and the IMF will play a significant role in shaping Ghana’s economic policies for 2025 and beyond. Key issues such as revenue mobilization, debt restructuring, and energy sector reforms will be central to these engagements.
The outcome of these talks will provide insight into the government’s fiscal direction and determine the level of continued IMF support. With the 2025 Budget expected to be presented in March, these engagements will be critical in ensuring that Ghana stays on course with its economic recovery efforts.
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