PFM, State Interest bill among key indicators for full IMF exit

Jafar Mojarrad, Executive Director from the IMF Washington, in charge of Africa (m) sandwiched by members of the finance committee of parliament

Government must meet certain requirements, including bringing certain legislation to parliament before end of March, in order to fully exit the IMF programme, chairman of the finance committee of parliament, Dr. Mark Assibey-Yeboah, has suggested.

These requirements he reckons are doable, and he is convinced the Board will give Ghana a clean bill of health and approve of its 7th and 8th review.

It consists of the Public Financial Management regulation and State Interest and Governance Authority bill.

Dr. Assibey-Yeboah explained that the Committee told the Fund that presentation to parliament does not amount to passage, and stressed that it cannot get government to pass these laws in a short time, given that it has to go through the formal processes before being passed.

The country is also expected to benefit from US$118m as part of the last tranche sometime in April, when the IMF Board approves fully Ghana’s exit.

“There are a number of prior actions government has to do before the end of March so that we get that clean bill of health: government has to bring some legislation to parliament, do certain things in the energy sector, and with all of them it has had discussions with the executive; and the last leg of their meeting was to meet with parliament, because  we play a key role in all of this.

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“By and large, I am convinced that the Board will approve the 7th and 8th review, and when we are done with that it means Ghana would have successfully exited the programme,” he told B&FT in an interview after parliament’s finance committee met with officials from the IMF at Parliament House in Accra on Wednesday.

The meeting involved Jafar Mojarrad, Executive Director from Washington in charge of Africa; Annalisa Fedelino, mission chief; Albert Touna, country rep; and Carlo Sdralevich, advisor African department.

Ghana is presently under the 7th and 8th review, and the officials are in town to have discussions of the review thus far; they will be going to present their report to the Board in Washington at the end of March.

“If they go to the Board, they have to pass a verdict on our performance. If the Board gives us a clean bill of health, it means we have exited the programme successfully.

“We went into the programme for policy credibility, so now that your economic performance, economic programmes are declared credible, it affects the interest rates you pay – so your rating improves, you borrow at cheaper rates; and wherever you go, you can tap into all manner of funds. It is a good thing to exit the programme successfully.”

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According to Dr. Assibey-Yeboah, post-IMF exit, it will mean that government is now ready to take-off; and he urged Ghanaians to be patient as things can only look up for the country.

The country has been under the programme for the past two years, and it comes with limitations, he stated.

“I think the economy’s managers have done well if you look at inflation December-end 2016, deficit on cash basis. We need people who are committed, so I applaud efforts made by the Economic Management Team, Finance, central bank – everyone has done well.”

Ghana entered the IMF programme in April 2015, seeking US$918m to restore fiscal stability, improve the macro economy and cut down on excessive expenditure.

It has subsequently gone through several reviews, and was even extended to a year because of the programme’s derailment.

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