Addison: Ghana needs to take advantage of reform momentum
The Governor of the Bank of Ghana, Ernest Addison, believes the government can take advantage of the reform momentum as it moves to achieve economic stability. Speaking during a press briefing on Monday, the BoG governor stressed the need to see through all structural reforms by the end of this year.
Tue, 02 Jul 2024 13:01:03 GMT
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AI Generated Summary
- Ghana receives $360 million IMF tranche, poised to receive another $360 million by fourth quarter of 2024, enhancing economic stability
- Measures like tight monetary policies and fiscal consolidation programs are being implemented to address currency depreciation and bolster reserves
- Bank of Ghana emphasizes the need to capitalize on reform momentum, commit to structural reforms, and strengthen the financial sector through recapitalization
Ghana's economy has recently received a significant boost with the disbursement of $360 million from the International Monetary Fund (IMF), marking the third tranche in a series of payments from a $3 billion arrangement. During a joint briefing by the government and the IMF, Finance Minister Mohamed Amin Adam announced that Ghana is poised to receive another $360 million tranche by the fourth quarter of this year. Despite facing pressure on its currency, Ghana has shown relative stability in comparison to the previous year. The cedi has experienced a year-to-date depreciation of 18.4% against the US dollar, an improvement from the 22% depreciation recorded in the same period in 2023. To address the recent currency depreciation, the government and the Bank of Ghana are implementing various key measures, including tight monetary policies, fiscal consolidation programs, gold for oil initiatives, and bolstering reserves through anticipated forex inflows from multilateral and bilateral institutions. The IMF's approval of the second review has paved the way for the disbursement of the third tranche, while preparations are underway for the fourth tranche in the fourth quarter of 2024. Additionally, the World Bank's Development Policy Operation is set to provide a tranche of $300 million in the third quarter, along with disbursements from other bilateral and financial institutions for various projects. Despite challenges stemming from speculation affecting the cedi, stakeholders are committed to influencing market sentiments positively to counteract detrimental speculation. Bank of Ghana Governor Ernest Addison emphasized the importance of capitalizing on the current reform momentum to achieve economic stability. He called for resolute dedication to see through all structural reforms by the end of the year, including the crucial recapitalization of the Central Bank. The significant increase in reserves, surpassing IMF program targets, demonstrates Ghana's progress towards financial stability. Furthermore, efforts to recapitalize banks are underway to enhance the sector's strength, stability, and profitability, with many institutions exceeding their targets. The sector is expected to remain sound and contribute to supporting economic growth.
