Ghana decides 2024: Will policy reforms be sustained post election?

Ghana has recently celebrated a significant milestone with the unlocking of a $360 million disbursement from the International Monetary Fund (IMF) following the successful third review of its extended credit facility arrangement. This latest disbursement brings the total received by Ghana to $1.92 billion since entering into a $3 billion program in May last year. Benjamin Boachie, Chief Economist at Secondstax, joined CNBC Africa to discuss this achievement, the country's sustained reform agenda, and the near-term investment outlook. Boachie expressed satisfaction with the outcome of the third review, highlighting that the IMF's positive tone was a result of Ghana meeting all the quantitative targets and witnessing favorable movements in various economic indicators. The $360 million disbursement is expected to bolster Ghana's currency, which has been a point of concern in the past. Boachie emphasized the overall strength of the program and the positive direction of the country's economic landscape. Moving forward, the focus shifts towards the upcoming elections in Ghana and the potential impact on the reform momentum. Boachie acknowledged the uncertainty surrounding a change in government, emphasizing the importance of continuity to sustain the progress achieved so far. He noted that the current administration has been instrumental in implementing the required reforms and highlighted the need for steadfast implementation post-election, regardless of the outcome. One key area of discussion was the outlook for the Ghanaian Cedi against the US dollar and other global currencies. The Bank of Ghana's governor expressed optimism about the Cedi's rebound, linking it to the easing of election-related uncertainties and the strengthening of FX buffers. Boachie shared some reservations regarding the inflation target, cautioning that the timeline set by the central bank might be overly ambitious. He emphasized the importance of managing inflation expectations and gradual progress towards achieving single-digit inflation. Looking ahead, the discussion turned to Ghana's GDP trajectory and the potential impact of the upcoming elections on the country's economic performance. Boachie highlighted the significance of maintaining the current reform momentum to support private sector growth and bolster the economy. He underscored the importance of continuity in policy implementation to sustain the positive trajectory of growth. The conversation also touched upon Ghana's international reserves and the overall economic outlook. Boachie pointed out the positive indicators in the external sector and current account, stressing the need for continued reforms to support growth and a conducive environment for investment. Despite the optimistic outlook, Boachie acknowledged the presence of downside risks, including the strong US dollar and potential trade protectionism. The discussion also delved into Ghana's debt restructuring program and the resilience of the banking sector. Boachie expressed confidence in the banking system's ability to withstand external pressures and highlighted the role of the Bank of Ghana in maintaining financial stability. Finally, the conversation touched on the potential actions of the Ghana Monetary Policy Committee (MPC) in their upcoming meeting. Boachie anticipated a pause in policy rate adjustments, citing the need for caution in light of recent economic trends. He emphasized the importance of a balanced approach to monetary policy to support economic stability. In conclusion, the interview underscored the importance of sustained reforms and policy continuity to ensure Ghana's economic stability and growth in the post-election period.