{
  "title": "IMF Executive Board Completes Fourth Review Under the ECF, Approves US$94.2 Million Disbursement and Program Extension; and Concludes 2017 Article IV Consultation with Ghana",
  "publication": "IMF News, August 30, 2017",
  "sourceUrl": "https://www.imf.org/en/news/articles/2017/08/30/pr17337-ghana-imf-executive-board-completes-fourth-review-under-the-ecf",
  "canonical": "https://www.imf.org/en/news/articles/2017/08/30/pr17337-ghana-imf-executive-board-completes-fourth-review-under-the-ecf",
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  "summary": "<p>August 30, 2017</p>",
  "publishDate": "2017-08-30",
  "sections": [
    {
      "heading": "Fourth ECF Review, Disbursement, Waivers, and Extension",
      "content": "- Completion of the fourth ECF review enables the disbursement of SDR 66.42 million (about US$94.2 million).\n- Total disbursements under the arrangement to date: SDR 398.52 million (about US$565.2 million).\n- The remainder of the arrangement is tied to the remaining reviews.\n- The Board approved Ghana’s request for waivers of non-observance of performance criteria, and modification of one performance criterion.\n- The arrangement was extended by one year.\n- Original three-year arrangement size: SDR 664.20 million (about US$918 million or 180 percent of quota at the time of approval).\n- Original approval date of the arrangement: April 3, 2015."
    },
    {
      "heading": "Program Objectives and Rationale",
      "content": "- Program aim: restore debt sustainability and macroeconomic stability; foster return to high growth and job creation; protect social spending.\n- The ECF provides sustained program engagement for protracted balance of payments problems."
    },
    {
      "heading": "Staff/Management Statement and Policy Priorities (Tao Zhang)",
      "content": "- Ghana’s macroeconomic performance has been mixed; policy slippages compounded shocks and produced significant external and domestic imbalances.\n- New government committed to macroeconomic stability, fiscal discipline, and an ambitious reform agenda; decisive implementation required to achieve higher and more inclusive growth.\n- Policy priorities and recommendations:\n  - Careful fiscal management to achieve the 2017 program targets and reverse unfavorable debt dynamics.\n  - Address revenue shortfalls and fully enforce expenditure control measures to contain current spending and prevent recurrence of domestic arrears.\n  - Continue fiscal consolidation and implementation of medium-term debt management strategy to reduce domestic refinancing risks.\n  - Anchor fiscal consolidation in wide-ranging structural fiscal reforms: broaden the tax base, enhance tax compliance, and improve public financial management (noting large unpaid commitments accumulated in 2016).\n  - Tackle energy sector inefficiencies and improve management of state-owned enterprises (SOEs); debt restructuring is helpful but not a substitute for stemming SOEs’ financial losses.\n  - As inflation decelerates, Bank of Ghana (BoG) should remain vigilant to bring inflation back to target; strengthen credibility of the inflation-targeting framework and develop the foreign exchange market.\n  - Continue BoG policy on zero financing of the government.\n  - Continue implementation of the banking system roadmap: timebound recapitalization plans for undercapitalized banks, resolution of insolvent banks, strengthen supervision and regulation, reduce outstanding liquidity assistance, and bolster the microfinance sector."
    },
    {
      "heading": "Economic Outlook and Recent Performance",
      "content": "- Growth:\n  - 2016 growth: 3.5 percent (lowest in two decades).\n  - Recovery expected in 2017–18 owing to increased oil production, declining inflation, and lower imbalances with right policy implementation.\n- Fiscal:\n  - Sizeable fiscal slippage in 2016 followed by target of significant fiscal consolidation in 2017 requiring sustained revenue collections and spending controls.\n- Inflation and exchange rate:\n  - Inflation has continued to decline.\n  - Exchange rate broadly stable.\n- External:\n  - External position improved, supported by strong foreign investor participation in the domestic debt market.\n- Medium-term projection:\n  - Both the fiscal deficit and the current account deficit are projected to decline gradually."
    },
    {
      "heading": "Executive Board Assessment",
      "content": "- Directors agreed with staff appraisal and commended corrective actions by the new government to bring the program back on track after 2016 fiscal slippages.\n- Directors’ concerns and recommendations:\n  - Noted long-standing challenges: exposure to external shocks, budget rigidities, and economic inefficiencies amplifying past slippages.\n  - Emphasized strong implementation of program policies and reforms to address risks and secure macroeconomic stability.\n  - Cautioned about implementation risks given revenue underperformance in first half of the year; urged expeditious corrective measures to preserve program targets.\n  - Emphasized prudent fiscal adjustment and welcomed targeted efforts to reverse debt dynamics and reduce financing needs.\n  - Urged addressing revenue shortfalls and enforcing expenditure control to contain current spending and prevent domestic arrears.\n  - Welcomed wide-ranging reforms in revenue administration and public financial management as essential for sustainable consolidation gains and fiscal space for priority spending.\n  - Emphasized tackling energy sector inefficiencies and improving SOE management; noted debt restructuring is not a substitute for stopping SOE losses.\n  - Encouraged BoG vigilance on inflation, strengthening of inflation-targeting credibility, foreign exchange market development, and continuation of zero government financing.\n  - Commended progress in banking system strengthening (timebound recapitalization plans, resolution of two insolvent banks); called for further steps to strengthen supervision/regulation, address liquidity risks and rising NPLs, and strengthen the AML/CFT framework.\n  - Highlighted the importance of wide-ranging structural reforms for higher and inclusive growth: enhance business environment, improve infrastructure, address energy sector inefficiencies, and improve access to finance."
    },
    {
      "heading": "Selected Economic and Financial Indicators (2014–22) — Key Figures from Table 1",
      "content": "- GDP at constant prices (annual % change)\n  - 2014: 4.0\n  - 2015: 3.8\n  - 2016: 3.3\n  - 2017 Prog./Est.: 3.5\n  - 2018 Proj.: 7.4\n  - 2019 Proj.: 5.9\n  - 2020 Proj.: 8.9\n  - 2021 Proj.: 5.1\n  - 2022 Proj.: 5.2\n  - 2023 Proj.: 5.4\n- Non-oil GDP (annual % change)\n  - 2014: 3.7\n  - 2015: 4.8\n  - 2016: 4.5\n  - 2017: 5.0\n  - 2018: 6.0\n- Oil and gas GDP (annual % change)\n  - 2014: 0.9\n  - 2015: -2.4\n  - 2016: -16.9\n  - 2017: 57.0\n  - 2018: 42.5\n  - 2019: 64.9\n- Real GDP per capita\n  - 2014: 1.4\n  - 2015: 1.2\n  - 2016: 0.8\n  - 2017: 4.7\n  - 2018: 6.1\n- GDP deflator\n  - 2014: 16.7\n  - 2015: 16.4\n  - 2016: 15.3\n  - 2017: 18.1\n  - 2018: 10.1\n- Consumer price index (annual average)\n  - 2014: 15.5\n  - 2015: 17.2\n  - 2016: 17.1\n  - 2017: 17.5\n  - 2018: 10.0\n- Gross capital formation (percent of GDP)\n  - 2014: 18.8\n  - 2015: 22.5\n  - 2016: 14.5\n  - 2017: 23.2\n  - 2018: 13.7\n  - 2019: 14.7\n  - 2020: 15.8\n  - 2021: 18.2\n- National savings (percent of GDP)\n  - 2014: 9.3\n  - 2015: 16.1\n  - 2016: 7.8\n  - 2017: 7.9\n  - 2018: 9.2\n  - 2019: 13.6\n  - 2020: 13.9\n- Foreign savings (percent of GDP)\n  - 2014: -9.5\n  - 2015: -7.7\n  - 2016: -6.4\n  - 2017: -6.7\n  - 2018: -6.1\n  - 2019: -5.8\n  - 2020: -5.4\n  - 2021: -5.0\n  - 2022: -4.7\n  - 2023: -4.5\n  - 2024: -4.3\n- Central government budget (cash basis) — Revenue (percent of GDP)\n  - 2014: 18.4\n  - 2015: 19.6\n  - 2016: 19.4\n  - 2017: 17.3\n  - 2018: 19.2\n  - 2019: 18.9\n  - 2020: 18.6\n  - 2021: 19.0\n  - 2022: 19.1\n- Central government expenditure (percent of GDP)\n  - 2014: 28.5\n  - 2015: 26.6\n  - 2016: 24.6\n  - 2017: 22.7\n  - 2018: 25.2\n  - 2019: 22.4\n  - 2020: 22.2\n  - 2021: 22.1\n  - 2022: 21.8\n  - 2023: 21.6\n- Overall balance (percent of GDP)3\n  - 2014: -10.1\n  - 2015: -7.0\n  - 2016: -5.2\n  - 2017: -9.3\n  - 2018: -3.5\n  - 2019: -6.3\n  - 2020: -3.8\n  - 2021: -3.2\n  - 2022: -2.9\n  - 2023: -2.8\n- Primary balance (percent of GDP)3\n  - 2014: 0.0\n  - 2015: -0.4\n  - 2016: 2.2\n  - 2017: 2.0\n  - 2018: 1.8\n  - 2019: 1.6\n- Net domestic financing\n  - 2014: 8.6\n  - 2015: 2.3\n  - 2016: 6.2\n  - 2017: 3.6\n  - 2018: 1.9\n- Central government debt (gross, percent of GDP)\n  - 2014: 70.2\n  - 2015: 72.2\n  - 2016: 67.7\n  - 2017: 73.4\n  - 2018: 63.6\n  - 2019: 70.5\n  - 2020: 66.1\n  - 2021: 62.8\n  - 2022: 60.1\n  - 2023: 57.6\n  - 2024: 55.1\n- Domestic debt (percent of GDP)\n  - 2014: 31.0\n  - 2015: 27.9\n  - 2016: 32.1\n  - 2017: 26.0\n  - 2018: 32.5\n  - 2019: 30.8\n  - 2020: 29.8\n  - 2021: 29.1\n  - 2022: 28.4\n  - 2023: 27.2\n- External debt (percent of GDP)\n  - 2014: 39.1\n  - 2015: 43.7\n  - 2016: 39.8\n  - 2017: 41.3\n  - 2018: 37.7\n  - 2019: 38.0\n  - 2020: 35.3\n  - 2021: 33.0\n  - 2022: 30.9\n  - 2023: 29.2\n  - 2024: 27.8\n- Credit to the private sector (annual % change)\n  - 2014: 41.8\n  - 2015: 31.7\n  - 2016: 11.0\n  - 2017: 19.9\n  - 2018: 20.5\n  - 2019:  ?? (table continues with projections)\n- Broad money (M2+) (annual % change)\n  - 2014: 36.8\n  - 2015: 14.4\n  - 2016: 24.8\n  - 2017: 15.1\n  - 2018: 15.9\n  - 2019: 21.0\n  - 2020: 16.5\n- Banks' lending rate (weighted average, percent)\n  - 2014: 29.0\n  - 2015: 27.5\n- Policy rate (percent, end of period)\n  - 2014: 25.5\n- Gross international reserves (millions of US$)\n  - 2014: 4,349\n  - 2015: 4,403\n  - 2016: 5,140\n  - 2017: 4,862\n  - 2018: 5,976\n  - 2019: 5,783\n  - 2020: 6,319\n  - 2021: 6,797\n  - 2022: 7,483\n  - 2023: 8,145\n  - 2024: 8,765\n  - In months of prospective imports of goods and services: 3.4 (most recent table entry)\n- Total donor support (millions of US$)\n  - 2014: 1,092\n  - 2015: 1,411\n  - 2016: 844\n  - 2017: 778\n  - 2018: 637\n  - 2019: 977\n  - 2020: 755\n  - 2021: 763\n  - 2022: 407\n  - 2023: 183\n  - 2024: 133\n  - In percent of GDP: 2.8; 2.1; 1.5; 0.7; 0.3 (table series)\n\nMemorandum items:\n- Nominal GDP (millions of GHc)\n  - 2014: 113,343\n  - 2015: 136,957\n  - 2016: 166,768\n  - 2017: 167,315\n  - 2018: 197,136\n  - 2019: 202,389\n  - 2020: 241,549\n  - 2021: 279,328\n  - 2022: 315,464\n  - 2023: 352,989\n  - 2024: 395,193\n- Nominal GDP (millions of US$)\n  - 2014: 38,774\n  - 2015: 36,893\n  - 2016: 42,638\n  - 2017: 42,778\n  - 2018: 45,464\n  - 2019: 49,226\n  - 2020: 52,863\n  - 2021: 56,415\n  - 2022: 60,449\n  - 2023: 65,127\n- GDP per capita (US$)\n  - 2014: 1,479\n  - 2015: 1,372\n  - 2016: 1,551\n  - 2017: 1,648\n  - 2018: 1,608\n  - 2019: 1,697\n  - 2020: 1,777\n  - 2021: 1,850\n  - 2022: 1,932\n  - 2023: 2,030\n\nSource: Press Release No. 17/337, August 30, 2017.\n\n---\n\n\n References\n\n- Tao Zhang\n- PRESS CENTER\n- Press Release No.15/159\n- ECF\n- http://www.imf.org/external/np/exr/facts/scf.htm\n- http://www.imf.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2017/08/30/pr17337-ghana-imf-executive-board-completes-fourth-review-under-the-ecf"
    }
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    "Published: August 30, 2017",
    "Completion of the fourth ECF review enables the disbursement of SDR 66.42 million (about US$94.2 million).",
    "Total disbursements under the arrangement to date: SDR 398.52 million (about US$565.2 million).",
    "The remainder of the arrangement is tied to the remaining reviews.",
    "The Board approved Ghana’s request for waivers of non-observance of performance criteria, and modification of one performance criterion.",
    "The arrangement was extended by one year.",
    "Original three-year arrangement size: SDR 664.20 million (about US$918 million or 180 percent of quota at the time of approval).",
    "Original approval date of the arrangement: April 3, 2015.",
    "Program aim: restore debt sustainability and macroeconomic stability; foster return to high growth and job creation; protect social spending.",
    "The ECF provides sustained program engagement for protracted balance of payments problems.",
    "Ghana’s macroeconomic performance has been mixed; policy slippages compounded shocks and produced significant external and domestic imbalances.",
    "New government committed to macroeconomic stability, fiscal discipline, and an ambitious reform agenda; decisive implementation required to achieve higher and more inclusive growth.",
    "Policy priorities and recommendations:",
    "Growth:",
    "Fiscal:",
    "Inflation and exchange rate:",
    "External:",
    "Medium-term projection:",
    "Directors agreed with staff appraisal and commended corrective actions by the new government to bring the program back on track after 2016 fiscal slippages.",
    "Directors’ concerns and recommendations:",
    "GDP at constant prices (annual % change)",
    "Non-oil GDP (annual % change)",
    "Oil and gas GDP (annual % change)",
    "Real GDP per capita",
    "GDP deflator",
    "Consumer price index (annual average)",
    "Gross capital formation (percent of GDP)",
    "National savings (percent of GDP)",
    "Foreign savings (percent of GDP)",
    "Central government budget (cash basis) — Revenue (percent of GDP)",
    "Central government expenditure (percent of GDP)",
    "Overall balance (percent of GDP)3",
    "Primary balance (percent of GDP)3",
    "Net domestic financing",
    "Central government debt (gross, percent of GDP)",
    "Domestic debt (percent of GDP)",
    "External debt (percent of GDP)",
    "Credit to the private sector (annual % change)",
    "Broad money (M2+) (annual % change)",
    "Banks' lending rate (weighted average, percent)",
    "Policy rate (percent, end of period)",
    "Gross international reserves (millions of US$)",
    "Total donor support (millions of US$)",
    "Nominal GDP (millions of GHc)",
    "Nominal GDP (millions of US$)",
    "GDP per capita (US$)",
    "[Tao Zhang](https://www.imf.org/en/About/senior-officials/Bios/tao-zhang)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[Press Release No.15/159](http://www.imf.org/en/News/Articles/2015/09/14/01/49/pr15159)",
    "[ECF](http://www.imf.org/external/np/exr/facts/ecf.htm)",
    "[http://www.imf.org/external/np/exr/facts/scf.htm](http://www.imf.org/external/np/exr/facts/scf.htm)",
    "[http://www.imf.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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