IMF Backs Ghana Again: Country Advances to Next Phase of Economic Reforms

Added: 2026-05-15

[00:00:00]All right, welcome uh to the marketplace. My name is Darw. Thanks for joining us everyone. Ghana has successfully concluded the IMF extended credit facility program and is transitioning to a new IMF technical assistance framework to deepen reforms.

[00:00:13]There's a press conference underway. We want to take you there now live.

[00:00:18]>> It is a form of technical assistance.

[00:00:20]We're supporting the government in implementing the reform agenda going forward. We hope that this signal is going to be well received by the markets. Certainly in our meetings with investors, this is something what the markets have been asking what's coming next after the ECF. Uh so we're very happy that the PCI was considered to be an appropriate instrument for uh the Ganian authorities. In terms of the um access to the capital markets, it's a sovereign decision for Ghana. We believe that uh going forward based on the fiscal trajectory we have discussed with the government uh government would be able to finance itself uh comfortably from domestic markets. We discussed the debt management strategy going forward and we believe that the resources are available and the confidence has returned to facilitating a recent access to the dome re-enter to the domestic capital markets which is a ultimate milestone of the success of the government policy agenda. Uh we in our discussion with international investors we do see a lot of interest in in exposure to Ghana. the good story of Ghana has been noticed and uh we get bombarded by requests uh from the investors to meet and talk about Ghana going forward. So whenever the government will decide to reenter capital markets uh certainly the interest will be there of course conditional and sustained progress in terms of the reforms. Um uh so the uh what are the lessons learned from the IMF bailout? I think um whenever I meet anybody asking questions about Ghana, the question I typically get is is this time is going to be different. Right? So this is something which is not the the question I can answer. I think minister has given assurances. But let me just say a few words about my my reflections on many discussions we have had with Ghanaian authorities. We we believe that the lessons have been learned. It was very difficult, very traumatic for the Ghanaian people, for the country to go through the crisis of 2022 and the pain has been real and the this pain has been internalized and the reform momentum under the ECF demonstrates that the lessons have been learned on that. Going forward, of course, it's important to continue prudent policies and continue reforms. What ECF has managed is to successfully stabilize the country but stabilization and resilience are two different things. So focus needs to be on building resilience going forward and for that the ultimate objective is not the constraints of the IMF coming from outside but ultimately the strength of the domestic institutions and this is what we really try to internalize in terms of the design of the PCI when we discuss it with our counterparts here and the focus there is not on adjustment the focus is rather on strengthening domestic institutions fiscal institutions financial institutions to ensure that not no contingent liabilities uh are created outside of the central government that no quasi fiscal activities build fiscal risk going forward that no ses p fiscal risk going forward for the government which will when the shock comes materializing drain of public financial resources so this is the focus and we're quite hopeful that the lesson has been internalized and it will be different this time >> it will be >> all right >> thank you very much um so we'll take more questions if there are any.

[00:03:57]>> Good morning. My name is Morris. I work in GTV to the IMF. The Bank of Ghana's negative equity position, does it pose any threat to our debt sustainability moving forward especially with the recapitalization conversation going on?

[00:04:16]Then to the finance minister, uh you hear from some ministries, departments and agencies that you are not releasing the money. Moving forward, moving forward is going to be the same approach to ensure sustainability.

[00:04:42]>> Thank you. My name is Echo from Funny. Um the person to your immediate right not too long ago gave some measure of subsidies of assault on fuel prices.

[00:04:53]How much is costing? We do not know but in respect of consolidation please ask him how much is it exability?

[00:05:10]What next? We have heard this song for far too long. It's as though stability is the ending itself. by this what is the what's next thing after stability and then can I have a final again people are categorizing the risks we have energy sector risks bank of Ghana risk if there be any risk to this program to this sector we have and which could derail this economy again what would it be and what advice do you have for the government thank you >> good afternoon my name is I in the cost of the implementation of the program Ghanaian get some cost including a haircut. What is the compensation that the government has for Ghanaian? And I would also want to know what are some of the efforts that the government intend to put in place to ensure that we are borrowing at a lower cost. We are able to generate more revenue and be able to repay especially building. Thank you.

[00:06:17]Okay, >> my name is I report one news and my question has to do with the state government enterprises. So uh Mr. Minister, I want to find out um is there any um further strategies um that will help cushion um the impact some of these eight enterprises have on the fiscal balances and the public sector bosses?

[00:06:47]Then question from some exporters. Um any further strategies to help push and the local?

[00:06:55]>> Yeah.

[00:06:58]>> All right. That would be >> okay. Thank you very much. Um let me start with echo.

[00:07:06]Echo first. We have not introduce subsidy and so the cost is zero. So um be rest assured I'm here with the minister responsible for energy and we have just to confirm that government of Ghana has not introduced any form of subsidy in the petroleum sector since the crisis.

[00:07:28]Second yes is you ask a question from stability what next I think it's a chain of three stability resilience and development build stability you build the stability you build resilience and then use the resilience to develop um clearly the stability is done we've announced same it's been confirmed even by the fund we've built some good resilience and we are building it continuously It's now time for us to develop and create jobs and that is where we are going. And so um in the coming days we'll be announcing our flagship uh design called a new economy um where we'll be looking at areas of development and job creation and that will be made known to the people of Ghana. But just to be assured that um from stability you build resilience and from resilience you you you build an economy that will benefit the masses and that is exactly where we are going. Um someone also asked a question as to whether government of Ghana is going to compensate um um those who suffered haircut. Um I do not know the um details of the prospectors that was signed an agreement that was signed between those who suffered unfortunately loss of investment. Um I do not recall that there is something of the sort that calls on the people of Ghana uh the Ghanaian government to give some form of uh compensation. I I think it was not agreed to and so um um we do not have any such liability on us based on what was agreed. Then there was another question on the central bank's um um negative equity and what it means um to their sustainability.

[00:09:23]Yes, the government of Ghana has a responsibility to make sure that the central bank um has a strong finances.

[00:09:29]Um we are working with a central bank.

[00:09:32]Um central bank will obviously generate income and they will obviously make some profit going into the future. Um until recently the central bank used to pay dividend to the central government and that was the case. Obviously they will have to make profit before they pay dividend. Um today they are not able to do that and it started um in 2022. Um obviously as a result of some of the debt restructuring and and also some of the activities and and some of the actions um the central bank will do whatever it takes to return to profitability and then part of those profitability will be used to reduce some of the negative equity and then government will also come in uh to support the central bank and so we are working together both government and the bank to bring that negative equity down and uh in the medium of term that will be solved. Um recently I went to parliament to present the new bank of Ghana bill uh amendment and in that amendment that has since been become a law uh it is obvious that government commit to fully capitalize the central bank by 2032 and so it's a gradual process and so gradually from now till 2032 6 7 years time the central bank will fully be capitalized and in that amendment we have also introduced automatic recapitalization.

[00:10:58]And so that what what that means is that anytime the central banks um um falls below its minimum capitalization, the central government automatically capitalize the central bank in 3 months.

[00:11:11]And so all of that has been put in place. And so I can assure you that we are not just sitting with care. It's important that our central bank is strong. It's important that we allow the central bank to also perform its mandate, constitutional mandate uh to ensure that um inflation is tained and controlled and so we'll do whatever it takes to support the central bank to be able to do what perform their mandate.

[00:11:35]Let me put it that way. Thank you.

[00:11:39]>> Thank you very much. Maybe starting with the last point on the building negative equity. So um it's not unusual for central banks to have negative equity.

[00:11:48]So me central banks separate with negative uh capital but what is important is what we call policy solveny. The fact that the income the central bank is generating can cover the all the costs and frictional cost and cost of doing monetary policy and bank of Ghana based on financial statement from 2025 has been policy solvent. So this is an important element to remember. So in terms of the debt sustainability we do factor in the cost of that going forward. back to VDC which will be published together with our staff report will assume a significant amount of recapitalization. We think we are actually overly conservative there as the minister has said central banks by running prudent policies can generate significant uh profits and these profits should be used to recapitalize the central bank and therefore reducing the need for the government to inject additional capital at the central bank.

[00:12:39]All that is part of our framework and we're quite confident that by 2032 or if not earlier the BG will be fully uh recapitalized. We also need to remember that 2025 was a very very unique year.

[00:12:53]There were multiple factors there which pressed the BG balance shape specifically very high open market operation cost. It's the cost of doing monetary policy because inflation was high even though it was decelerating rapidly. uh the interest rates were also very high and therefore cost of this open market operations uh mopping up liquidity from the system were very high and that uh of course you know is a burden on the uh BG balance sheet also exchange rate appreciated which works in accounting terms against the BG income as well. Some of this has been compensated by the valuation changes on the gold which was quite good and as you know BG has sold some of its gold in the end of 2025 and we have fully supported this decision because it helped to lock in some of the valation gains on on the gold uh going forward and support the income of the central bank. We there were also losses on the domestic gold purchase program and we have discussed with our counterparts how to minimize them and reduce this factor and eliminate it going forward and we'll be reporting that in the staff report. Now the on on subsidies uh in the fuel sector as the person to my right has mentioned um you know we confirm there are zero costs currently to to the budget because the it's not a subsidy it's a adjustment of the regulatory margin. It's not part of the domestic revenue pool. So it's a separate separate type of expense. So this was a temporary measure. The government introduced only temporarily which is very much in line with our advice. We don't want the measures which are introduced and then sticking there because it's very difficult to remove that. It's going to be automatically removed when uh as planned. So so overall we supported the decision but of course the risk is still there. The commodity prices are still volatile.

[00:14:49]Middle East conflict is still ongoing and therefore uh the the volatility of f fuel prices is still there and a risk factor going forward. If uh there's any additional support going forward then we would recommend to do that through well targeted uh subsidies which are income based and merit based and you know reduces the drain and allocates on public resources and allocates the the resources only to those who really need the support. Um now uh in terms of the what's next after this stability as I mentioned in my introductory remarks we spent a lot of time discussing what the better than expected the faster than expected fiscal consolidation and the improvements in the debt trajectory means for the fiscal space. This fiscal space is ultimately the space what the government generated by strong uh policies and now which can be used going forward to support uh support uh economic growth support employment in and the strategic investment in important sectors and this was much of our discussion. I will not steal the thunder from the minister and the government in terms of the big announcements but uh we we understand what the strategy there going forward but again strong policy effort generated additional physical space and we're now discussing how to spend it this is a remarkable turnaround for Ghana going forward >> in terms of risks going forward I think I would like to highlight two things first is again related to the fiscal uh policy I think we jointly managed to introduce strong safeguards in terms of controlling uh government expend expenditures in the central government but there are significant risks outside of the central government control meaning in the so sector and quas fiscal activities outside of the central government and historically for Ghana that was predominant factor which drove the trajectory of the debt sustainability it's not just the fiscal deficit itself but also the quasi fiscal activities and the materialization of fiscal risk outside of the central government which generated big shocks in the in the in the that trajectory going forward and addressing those as part of the PCI reform agenda will be critical uh thing for us to do. The second risk I would like to highlight is gold. Of course I don't need to tell you gold prices have been historically high and that supported uh going to turn around.

[00:17:23]Uh it's hard to predict where the gold price is going to be in the future.

[00:17:27]Commodity prices are always very volatile especially in the uncertain geopolitical environment but that's why much of our discussion with the authorities with the BG with minister of finance is to how to build the buffers using the positive terms of trade shock for Ghana right now and how to ensure that the economy is insulated from the shocks going forward if and when we materialize. So these are kind of important things I wanted to highlight.

[00:17:51]>> Thank you.

[00:17:51]>> Thank you.

[00:17:52]>> Thank you.

[00:17:54]So that will be it for today's briefing.

[00:17:57]Thank you all for coming.

[00:17:58]>> Thank you.

[00:18:03]>> Thank you very much.

[00:18:14]>> I had one final question. So we decided to just about that.

[00:18:22]>> All right, you've been watching a joint press conference, the government of Ghana and the IMF on the IMF program review. And so, as you've been reporting uh this afternoon, there is uh Ghana has concluded the program successfully and there's a new twist, a transition to a new technical assistance framework.

[00:18:39]Joining me on Zoom, professor of finance at the Andrews University, Williams Proud, to break this all down for us and make us understand it better. Uh first of all explain to us what this new technical framework is.

[00:18:52]>> Um good afternoon to you Darl and good afternoon to your viewers. Um so you know um IMF has three main um objectives.

[00:19:01]Um the first one is that um they do global assessment to find out if there are any weakness in any economies and then when they able to establish those weakness and any risks they come out with a lending facility which is the second um um rule of IMF and that lending facility will al aim is to ensure stability that is what Ghana went through and now it's been confirmed we have the stability the third function of IMF is to provide technical support and that technical support or PCI. So in the PCI um IMF is going to do three main things for Ghana.

[00:19:47]um one they are going to ensure that um any policy that Ghana government will want to come out is something is a policy that will ensure that there is one resilience and there is one another option provide development and it's it's not going to throw us back to where we went and then in the technical support um IMF is going to provide training for our technical functionaries that we have you know the minister Ghana is trying to set up another technical um supervisory um wing.

[00:20:26]>> So those who are going to be in that um function are going to receive a lot of training and to be able to um provide um right advice to to the government. And in the technical support um one important thing that we they are going to do is that they going to find out how our central banks are are performing um make sure that there's no spillages.

[00:20:51]Um also they're going to make sure that anytime government is coming out with new form of taxation in terms of physical what will be the impact and then on the line of any time of there's a budget IMF will also come in to assist Ghana government to ensure that our budget is in line and is not going to cause any global um shocks. Um the fifth one is um on the on the on the line of public financial management >> must be deepened and which is very key.

[00:21:20]IMF is going to the technical assistant is going to support Ghana in statistical support using data in making decision and finally financial regulation. So these are the five main areas IMF is going to look out and work with Ghana to ensure that our economy now that is stable move to resilience and from resilience help government to develop and create jobs.

[00:21:45]>> Well prof we have just one minute I just want to find out how this PCI will influence investor confidence and capital inflows into Ghana. I mean um so it is is a bedrock of any investor to make sure that Ghana is going to go back into what we we went through. So the PCI is is something anytime IMF rider PCI report it is something the investors look out for. It tells whether our economy is stable, is resilient >> and ensuring development and that will drive in a lot of um inflow and then also help to reduce cost in terms of cost of funds if Ghana government decides to go into any um equity market to go and borrow.

[00:22:32]>> All right. Uh thank you so much uh Professor Williams professor of finance at Andrew University. I'm sure be talking about this >> uh a bit more in the coming days. I appreciate your time with us. But money is on our website myjawline.com/business.

[00:22:47]Government announces completion of IMF bailout program. Also, IMF1's Bank of Ghana gold scheme could weaken central bank balance sheet.jawline.com/business.

[00:22:57]Thanks for watching. Uh more news on that website to catch up during the weekend. Stay with us.

[00:23:22]Bye.