## IMF Executive Board Completes Third ECF Review for Ghana, and Approves US$116.2 Million Disbursement

_IMF News, September 29, 2016_

## Source details

**Canonical URL:** [IMF Executive Board Completes Third ECF Review for Ghana, and Approves US$116.2 Million Disbursement](https://www.imf.org/en/news/articles/2016/09/29/pr16439-ghana-imf-executive-board-completes-third-ecf-review)

## Other formats

- [Markdown version](/en/news/articles/2016/09/29/pr16439-ghana-imf-executive-board-completes-third-ecf-review/index.md)
- [Structured JSON version](/en/news/articles/2016/09/29/pr16439-ghana-imf-executive-board-completes-third-ecf-review/index.json)
- [Bundle manifest](/en/news/articles/2016/09/29/pr16439-ghana-imf-executive-board-completes-third-ecf-review/bundle-manifest.json)

## Bibliographic details
- Published: September 29, 2016

---

### Review completion and disbursement
- On September 28, 2016 the Executive Board completed the third review of Ghana’s economic performance under the program supported by an Extended Credit Facility (ECF) arrangement.
- Completion of the review enables the disbursement of SDR 83.025 million (about US$116.2 million).
- Total disbursements under the arrangement after this review: SDR 332.1 million (about US$464.6 million).

### Program size, approval, and objectives
- Ghana’s three-year arrangement: SDR 664.20 million (about US$918 million or 180 percent of quota at the time of approval).
- Arrangement approval date: April 3, 2015.
- Program aims:
  - Restore debt sustainability.
  - Restore macroeconomic stability.
  - Foster a return to high growth and job creation.
  - Protect social spending.

### Program adjustments and waivers
- During the review, adjustments were made to the program to ensure it remains on track and to enhance its prospects of success.
- The Executive Board granted waivers, including for minor deviations in a few program targets.

### IMF assessment — macroeconomic situation and risks (Tao Zhang, Acting Chair and Deputy Managing Director)
- Implementation of the ECF-supported program by the Ghanaian authorities is described as “broadly satisfactory,” but the economic outlook remains challenging.
- Progress noted:
  - Stabilizing the macroeconomic situation.
  - Reducing financial imbalances.
- Persistent risks:
  - Fiscal risks remain elevated.
  - Revenue shortfalls need to be addressed.
  - Expenditure control measures should be fully enforced to contain the wage bill and other current spending.
- Fiscal projection and implications:
  - The government is projected to run a primary surplus this year.
  - The projected primary surplus, together with stability of the cedi, should contribute to a marked decline in the debt-to-GDP ratio.
  - Ongoing fiscal consolidation and implementation of the medium-term debt management strategy are key to further reducing domestic refinancing risks in 2017.
  - Authorities should remain cautious in accessing external market financing with due consideration to costs and debt sustainability.

### Policy and reform recommendations
- Fiscal policy and public financial management:
  - Broaden the tax base and enhance tax compliance.
  - Strengthen control of the wage bill.
  - Enhance public financial management (PFM).
  - Note: The recently adopted PFM legislation is an improvement over previous laws.
- State-owned enterprises (SOEs):
  - Steps taken to address SOEs financial problems are welcome.
  - More work is needed to reduce risks to the economy, the financial sector, and the government budget from SOE underperformance.
- Monetary policy and central bank governance:
  - The Bank of Ghana (BoG) should maintain a tight monetary policy stance to bring inflation back to target.
  - Recent amendments to the BoG Act have introduced some improvements to central bank governance.
  - Continued scope for central bank financing of the government and government influence on central bank operations remain significant shortcomings.
  - Authorities’ commitment to maintaining zero BoG financing of the government under the program and to introducing additional amendments to the BoG Act in 2017 are welcome.
- Financial sector policies:
  - Full and timely implementation of the BoG’s roadmap for the banking system is essential to address financial sector risks.
  - Adoption of two new banking sector laws strengthens the authorities’ toolkit.
  - The new legislation warrants further improvements to enable authorities to effectively safeguard financial stability.

*IMF Press Release No. 16/439 (September 29, 2016).*

---


## References

- [The Executive Board](http://www.imf.org/external/np/sec/memdir/eds.aspx)
- [Tao Zhang](https://www.imf.org/en/About/senior-officials/Bios/tao-zhang)
- [Ghana and the IMF](http://www.imf.org/external/country/GHA/index.htm)
- [Special Drawing Rights (SDRs) -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2023/special-drawing-rights-sdr)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [Press Release No.15/159](http://www.imf.org/external/np/sec/pr/2015/pr15307.htm)
- [ECF](http://www.imf.org/external/np/exr/facts/ecf.htm)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2016/09/29/pr16439-ghana-imf-executive-board-completes-third-ecf-review_