IMF conditionalities on $1b deal with Ghana

Ghana’s Deputy Minister of Transport Joyce Mogtari Bawa has confirmed to Morning Starr host Kafui Dey that indeed Ghana has reached a $1-billion deal with the International Monetary Fund (IMF) aimed at propping up the young oil producer’s wobbling economy.

Mogtari Bawa said the three-year programme comes with three main conditionalities, which she shared on the Morning Starr.

They include: aligning the public sector wage bill, which will help the Government have a centralised wage bill system “to ensure that we are able to remove, where it is necessary, illegal names that should not be there.”

Secondly, according to the Deputy Minister, the Bretton Wood Institution wants “a fully decentralised or deregulated petroleum process, and thirdly, they want a cap on our loans and contracts.”

The three-year programme will be rolled out once the board of the IMF endorses it.

Ghana approached the IMF in the middle of last year following a sharp fall in the country’s currency, Cedi, by about 40 per cent against the Dollar and other international currencies of trade, in the first three quarters.

The Cedi gained some grounds in the last quarter of 2014 after the Government injected $2.7 billion dollars into the economy through a $1-billion Eurobond flotation and $1.7-billion syndicated loan from the Ghana Cocoa Board.

The IMF programme is expected to help the Cedi gain further ground and insulate it against the shocks of inflation.

Ghana grew strongly for years, but the forecast for 2015 is a relatively low 3.9 percent, according to Reuters.

Apart from the issues with the Cedi, the Ghanaian economy is dogged by a stubborn budget deficit – 12 per cent in 2013 – and an inflation rate of 16.4 per cent, with a current debt stock of $70.6 billion dollars.