For more information, see Ghana and the IMF

Enhanced Structural Adjustment Facility
Policy Framework Paper, 1999-2001


Table 1. Ghana: Timing and Implementation of Macroeconomic and Structural Adjustment Policies, 1999-2001

Policy Area

Objectives and Targets

Strategies and Measures

Timing of Measures

I. Fiscal policies
   A. Revenue Improve domestic revenue mobilization and strengthen tax administration. Review tax system and make adjustments to ensure that the revenue-to-GDP ratio does not decline in the medium term. 1999-2001
   B. Expenditure Improve efficiency and effectiveness of public expenditure through improved allocation and management of public resources. Reduce road sector arrears by 30 billion in the first half of 1999.
Eliminate road sector arrears.
June 1999
December 2000
   C. Budget and
  Provide weekly cash flow projections of government treasury operations for public debt and liquidity management. March 1999 onwards
Implement Budget and Public Expenditure Management System (BPEMS) system in targeted ministries and spending units. Budgets for 2000 and 2001
II. Monetary policy
   and financial
   sector reform
Enhance the effectiveness of the system of indirect monetary control and develop the secondary market in domestic debt instruments. Encourage the use of repurchase agreements. 1999-2000
  Accelerate financial sector reforms and promote greater competition through divestiture. Ensure establishment by Bank of Ghana of monitorable quarterly targets for banks not meeting capital adequacy requirements. Fully invest additions to deposits in government securities. March 1999
    Remove the freeze on bank licensing. March 1999
    Withdraw licenses of banks that do not meet capital adequacy requirements. September 1999
    Sell at least 30 percent of shares of the National Investment Bank. September 1999
    Divest all Bank of Ghana shares in commercial banks, except for Agricultural Development Bank (ADB). December 1999
    Reduce government participation in Ghana Commercial Bank (GCB) to 20 percent or less of shares. December 1999
    Divest Bank of Ghana shares in ADB. June 2000
  Strengthen banking supervision. Implement revised regulations for foreign currency exposure limits. June 1999
    Set up an apex institution for the rural banking system; final supervision authority over the rural banks will remain with the central bank. December 1999
    Submit new draft central bank law and banking law to parliament. December 1999
  Improve the payments system. Reduce the maximum float time of checks from 5 to 3 days in Accra and from 21 to 9 days between Accra and the regions. September 1999
III. External sector policy
   A. Exchange
Deepen the foreign exchange market. Assess foreign exchange operations with a view to improving market practices. 1999-2001
    Gradually reduce the share of export receipts that needs to be surrendered to the Bank of Ghana. 1999-2001
   B. External debt
Reduce external debt service burden. Strictly limit new short-term borrowing and adhere to ceilings envisaged in the program regarding new nonconcessional public and publicly guaranteed borrowing. 1999-2001
    Publish annually list of guaranteed loans in the budget documents. 1999-2001
   C. Trade policy Ensure that trade system enhances external competitiveness. Implement Gateway Project aimed at removing constraints to trade. 1999-2001
    Complete comprehensive review of tariff regime. September 1999
    Reduce the tariff top rate to 20 percent in harmony with the subregion. January 1, 2000
    Monitor exemptions and report them on a quarterly basis by the Harmonized System (HS) code. 1999-2001
IV. Sectoral policies
   A. Public sector
Reform subvented agencies. Obtain cabinet approval of a legal framework for the reform of subvented agencies. June 1999
    Obtain cabinet approval of alternative employment program for retrenched workers of subvented agencies. December 1999
    Obtain cabinet approval of a fully costed program to reform remaining subvented agencies. June 2000
    Complete pilot reform of at least 17 subvented agencies. December 2001
    Complete restructuring of central management agencies. December 2001
   B. Local
Develop capacity at the local level. Submit to parliament draft legislation to establish local government service. June 1999
    Complete study of fiscal decentralization. December 2000
   C. Private sector
Improve Ghana’s economic competitiveness through privatization. Announce a divestiture work program, including annual targets for divestiture receipts for the period 1999-2000.
Decide on the treatment of the stock of outstanding liabilities of the State Housing Corporation, Electricity Company of Ghana, Ghana Railways, and Ghana Airways.
March 1999
June 1999
    Publish revised privatization impact assessment. June 1999
    Publish annual audited accounts of the Divestiture Implementation Committee (DIC):
subsequent years.

September 1999
Mid year
    Outsource for divestiture Ghana Airways, Ghana Railways, and Electricity Company of Ghana. December 1999
   D. Electricity Implement power sector reform program. Issue "Statement of Power Sector Development Policy." March 1999
    Complete and issue Transitional Power System Development Plan (1999–2001). September 1999
    Publish and implement complete "Guidelines for Fixing Rates for Electricity Services" (Section 16 of Act 538). September 1999
    Enact legislation on "Electricity Regulations—Operation of National Interconnected System" (Section 546 of Act 541) and complete separation of electricity transmission utility (National Grid Company Ltd.) from Volta River Authority (VRA). December 1999
    Offer for sale the Electricity Company of Ghana. December 1999
   E. Petroleum Promote competition in marketing and supply. Complete financial restructuring for the Tema Oil Refinery (TOR) Ltd. June 1999
    Enact legislation on "Petroleum Regulations—Marketing of Petroleum Products" (Section 56 of Act 541) and complete phase out of practice of setting maximum retail margins for petroleum products. December 1999
    Offer TOR for sale. December 1999
  F. Transportation Ensure functioning of road fund. Adjust fuel levy as agreed under the Road Subsector Strategy. 1999-2001
    Complete tolling of approved roads. December 1999
  Improve efficiency and lower costs of rail transport. Issue invitation for bids to concession Ghana Railways. June 2000
  Increase competition in supply of port services. Issue invitation for bids to concession port operations. June 2000
   G. Water Promote private participation and competition to improve supply. Implement a program of tariff increases to achieve cost recovery. Issue invitation for bids for lease of urban water systems. 1999-2001
October 1999
    Convert Ghana Water and Sewerage Corporation into Ghana Water Company and complete staff rationalization program. January 2000
    Complete transfer of all small water systems and remaining sewerage systems to district assemblies. December 2000
   H. Agriculture Sustain food security and increase foreign exchange earnings through export diversification. Submit Agricultural Services Sector Investment Plan (AGSSIP) to cabinet for approval.
Implement AGSSIP.
September 1999

June 2000
  Improve competitiveness of Ghana’s cocoa sector. Obtain cabinet approval of the medium-term cocoa strategy, including timetable for key measures. March 1999
    Offer for sale the Produce Buying Company (PBC). June 1999
    Accelerate the increase in farmers’ share in f.o.b. price of cocoa starting in 1999/2000 crop season to at least:
     60 percent in 1999/2000, and
     62 percent in 2000/2001.
    Ensure equal access to Cocoa Marketing Board (Cocobod) crop financing and warehousing by licensed buying companies. 1999/2000 crop season
    Allow qualified Licensed Buying Companies (LBCs) to export at least 30 percent of their cocoa purchase. 2000/2001 crop season
   I. Fisheries Develop sustainable fisheries. Submit to parliament the Fisheries Management and Development Bill. December 1999
   J. Forestry and
Ensure conservation of natural resources and protection of the environment. Periodically increase forest fees to reflect the stumpage value of trees, with rates ranging from 5 percent to 20 percent of f.o.b. timber prices, depending on the demand and inventory levels of the species. 1999-2001
    Implement the provisions of the Timber Resource Management Act, 1998, and its regulations. 1999
  Promote more effective environmental resource management. Initiate pilot scheme on community collaboration in resources management.
Submit to parliament revised wildlife regulations.

    Ensure Energy Commission enforcement of standards for gasoline stations. June 2000
   K. Land
  Obtain cabinet approval of the draft national land policy. 1999
V. Social policies
   A. Education Improve the quality of, and access to schooling. Formulate intermediate targets, monitoring indicators, and a financing plan for free compulsory universal basic education. July 1999
    Formulate a revised policy framework for tertiary education with sustainable financing. October 1999
    Formulate a phased implementation plan for basic education. December 1999
    Formulate an implementation plan for decentralization of school management responsibilities to districts. December 1999
    Adopt measures to improve learning outcomes, as evidenced by improving student test results. 1999-2001
    Design and implement an education strategy that will increase national girls net enrollment in primary schools to 48.5 percent. 2001
    Target expenditures on new classroom construction to the deprived areas. Budgets for 2000 and 2001
    Design a self-sustaining student loan scheme. October 2000
   B. Health Improve coverage and quality of health and family planning services. Increase health expenditure as a percent of domestic primary expenditure and maintain a reasonable balance between capital and recurrent expenditures. 1999-2001
    Increase the number of budget management centers (BMCs) that are able to provide quarterly expenditure returns. 1999-2001
    Elaborate a hospital development policy. December 1999
    Develop three-year rolling procurement plans for BMCs. December 1999
    Increase the number of contracts between district hospitals, both with nongovernmental organizations and with private providers of health services. 1999-2001
C. Poverty Raise living standards of the poorest segments of population. Design small-scale pilot poverty-reduction programs in the urban and rural areas.
Complete the fourth Ghana Living Standards Survey.

June 1999
    Prepare a national poverty-reduction program in collaboration with donors. September 1999
VI. Statistical issues Improve quality and timeliness of statistics. Set up weekly indicators of market conditions (exchange rates, reserve money, net foreign assets of the central bank, net placement of government securities outside the central bank, interest rates) to be prepared with no more than one week lag. April 1999
    Assess and explain discrepancy in import data between data reported by Automated System for Customs Data (ASYCUDA) systems and by Customs, Excise, and Preventive Services (CEPS). June 1999
    Reduce lags in reporting consumer prices indices and monetary accounts to one month and in reporting budgetary data to six weeks. June 1999
    Continue the quarterly publication of updated national accounts (sources and uses) with a lag of at most six months. 1999-2001
    Conduct a housing and population census. 2000

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