The International Monetary Fund (IMF) granted $581 million to Ghana under its extended credit facility program and has disbursed the final $179 million to the country; however, there are some obstacles ahead for the Ghanaian government.
The IMF executive board released a statement with its deputy director Naoyuki Shinohara pointed to the increase short-term risks to macroeconomic stability. “A rapid depreciation of the cedi is fueling inflation and reserve cover has fallen below comfortable levels.” He continued, “Furthermore, spending overruns at the end of 2011, large public wage increases, and re-emergence of energy subsidies have created the need for corrective actions to achieve fiscal targets.”
Shinohara said that the government needed to accelerate ongoing efforts to complete fiscal reform with priority areas including tax administration and public financial management. He said, “In addition, given Ghana’s increasing reliance on non-concessional financing, it is critical to develop a robust and transparent framework for public investment prioritization and debt management.”
“Financial sector reforms continue to be a priority. The authorities should sustain their efforts to strengthen the legal and regulatory framework and improve supervisory capacity. It will also be important to continue to address long-standing deficiencies in Ghana’s AML/CFT regime,” Shinohara added.
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