IMF Staff Concludes 2019 Article IV Consultation Mission to Ghana

October 24, 2019

End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision.
  • The macroeconomic outlook remains favorable, supported by overall prudent economic policies, strong extractive industry activity, and a safer banking system.
  • Maintaining fiscal discipline in the run-up to the 2020 elections will be critical to safeguard the macroeconomic gains achieved since 2017.
  • Tightening monetary policy may become necessary should price or exchange rate pressures emerge.

An International Monetary Fund (IMF) team, led by Carlo Sdralevich, visited Accra September 30-October 11, 2019 to conduct discussions on the 2019 Article IV Consultation, which was concluded in Washington, D.C. on the occasion of the 2019 IMF and World Bank Annual Meetings. The team held constructive and candid discussions with Vice President Bawumia, Finance Minister Ofori-Atta, Bank of Ghana Governor Addison, other senior government officials, Finance Committee of Parliament, private sector representatives, labor unions, and civil society organizations.

Mr. Sdralevich issued the following statement:

“Ghana’s macroeconomic outlook remains favorable, supported by strong activity in the extractive industry and a safer banking system. Real GDP growth is projected at around 7 percent in 2019. September consumer price inflation, at 7.6 percent in the rebased CPI series, is just below the 8 percent target. The cedi has depreciated by about 10 percent from the beginning of 2019. Bank of Ghana’s international reserves are projected to record a build-up in 2019, supported mainly by an improving trade balance and external borrowing. The primary risk to the outlook remains policy relaxation in the run-up to the 2020 elections.

“After the successful completion of the program with the IMF, the authorities’ policies have remained prudent and maintained macroeconomic stability. Nevertheless, implementation of the 2019 budget has been challenging, owing to lower than expected revenues, frontloading of spending on some government flagship programs, and unexpected security outlays reflecting emerging security challenges from the Sahel region. In addition, longstanding losses in the energy sector have spilled over to the budget and, together with the cost of the financial sector cleanup, have contributed to the rise of public debt, projected at about 63 percent by year end. But, the government is committed to keeping the budget deficit (excluding financial sector restructuring and energy costs) below 5 percent of GDP as well as a primary surplus, in line with the Fiscal Responsibility Act.

“While 2020 budget preparations are ongoing, the mission underlined the need to adopt an appropriately tight budget to limit financing needs, contain debt build-up, and support the external position. This will likely require both spending and revenue measures. The IMF team recommended avoiding spending and financing operations outside the budget to enhance budget credibility and transparency. In the medium term, raising domestic revenues remains a priority to create fiscal space and buttress fiscal sustainability. The authorities should also forge ahead with the implementation of the Energy Sector Recovery Plan to limit contingent liabilities in the energy sector.

“The monetary policy stance appears appropriate, but it should continue to remain vigilant to inflationary risks. Tightening may become necessary should inflationary or exchange rate pressures emerge. The central bank’s focus on building external buffers going into 2020 is a welcome development.

“The Bank of Ghana is well advanced in the clean-up of the savings and loans and finance house sub-sectors, another important piece in the extensive reform of the financial sector. The recapitalization of the remaining locally-owned banks and the reduction of the overhang of nonperforming loans will be key to boosting credit to the private sector and to buttress growth in non-extractive activities. The new deposit insurance scheme, the ongoing strengthening of regulatory and supervisory regimes, and the work of the Financial Stability Council are also steps in the right direction. Going forward, both robust implementation and deepened accountability remain critical to prevent a recurrence of weaknesses in the financial sector.

“The mission analyzed prospects for strong and sustained economic growth, including long-term growth targets and structural transformation envisaged under the Ghana Beyond Aid agenda, and the contribution of the financial sector to economic activity. Under the Fund’s 2018 Framework for Enhanced Engagement on Governance, the IMF team also discussed governance in the fiscal and financial sectors, including in the areas of Anti-Money Laundering and Combating the Financing of Terrorism, and recent progress in the establishment of anti-corruption institutions.[1]

“The IMF team would like to thank the Ghanaian authorities for their hospitality and wish them every success in their ongoing efforts to raise economic growth and improve livelihoods.”


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