## IMF Survey : Ghana Gets $918 Million IMF Loan to Back Growth, Jobs Plan

_IMF News, April 3, 2015_

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**Canonical URL:** [IMF Survey : Ghana Gets $918 Million IMF Loan to Back Growth, Jobs Plan](https://www.imf.org/en/news/articles/2015/09/28/04/53/socar040315a)

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## Bibliographic details
- Published: April 3, 2015

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### Overview
- IMF Executive Board approved a $918 million loan to Ghana under the IMF’s Extended Credit Facility.
- Financing package extends over three years and backs a reform plan agreed in principle by an IMF staff team in February.
- Publication date: April 3, 2015.

### Economic context and key risks
- Ghana entered the global capital market for the first time in September 2007.
- The country started oil production from offshore wells in 2010.
- Growth dynamics:
  - Economic growth rate topped 9 percent in 2011.
  - Growth decelerated markedly in 2014, to an estimated 4.2 percent, driven by a sharp contraction in the industrial and service sectors.
- Inflation and monetary conditions:
  - Policy interest rates were hiked in 2014, bringing them to 21 percent.
  - Headline inflation reached 17 percent at end-2014, above the 8 +/- 2 percent official target range.
- Main risks to prospects:
  - Large fiscal and external imbalances.
  - Electricity shortages that contributed to slowing activity.
  - Currency depreciation that increased input costs and harmed domestic demand.

### Main objectives of the reform program
- Restore macroeconomic stability to boost growth and reduce poverty by:
  - Tighter fiscal discipline.
  - Strengthened public finances.
  - Slowing inflation.
- Support faster growth and job creation while protecting social spending.

### Main pillars of the reform program
- A sizeable and frontloaded fiscal adjustment to restore debt sustainability, focusing on:
  - Containing expenditures through wage restraint and limited net hiring.
  - Measures to mobilize additional revenues.
- Structural reforms to strengthen public finances and fiscal discipline by:
  - Improving budget transparency.
  - Cleaning up and controlling the payroll.
  - Right-sizing the civil service.
  - Improving revenue collection.
- Restoring the effectiveness of the inflation targeting framework to help bring inflation back into single digit territory.
- Preserving financial sector stability.

### Fiscal measures, expected macro effects, and sequencing
- Fiscal strategy:
  - Expand revenue collection.
  - Restrain the wage bill and other primary expenditures.
  - Make space for priority spending and for clearing all domestic arrears.
- Macroeconomic transmission and outlook:
  - Reform measures are expected to dampen non-oil growth initially in 2015 ahead of a projected growth rebound in subsequent years.
  - Government projects an economic growth pickup to start in 2016, driven by expected large increases in Ghana’s hydrocarbon production.
  - Lower inflation and interest rates, combined with a more stable exchange rate, would help support private sector activity.
  - Increased oil exports and lower oil imports on the back of domestic gas production would help improve the current account and support reserves over the medium term.

### Social protection and distributional considerations
- Government committed to safeguard social and other priority spending under the program.
- Part of the fiscal space created by the adjustment is to be used to expand targeted social safety nets.
- Social programs will be expanded to:
  - Restore real incomes of the poor after three years of high inflation.
  - Mitigate the adverse impact of fiscal consolidation.

*IMF Survey : Ghana Gets $918 Million IMF Loan to Back Growth, Jobs Plan — April 3, 2015*

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## References

- [https://www.imf.org/en/News/country-focus](https://www.imf.org/en/News/country-focus)
- [PRESS CENTER](http://presscenter.imf.org/)
- [IMF Country Focus](https://www.imf.org/en/news/country-focus)
- [Press release](http://www.imf.org/external/index.htm)
- [Gabon’s non-oil growth](http://www.imf.org/external/pubs/ft/survey/so/2015/CAR022515A.htm)
- [Video: Ghana’s financial system](http://www.imf.org/external/mmedia/view.aspx?vid=3806178548001)
- [was agreed](http://www.imf.org/external/pubs/ft/survey/so/2015/CAR022615A.htm)
- [Africa’s frontier emerging markets](http://www.imf.org/external/pubs/ft/fandd/2008/09/nellor.htm)
- [September 2007](http://www.imf.org/external/pubs/ft/fandd/2008/09/ahmed.htm)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2015/09/28/04/53/socar040315a_