Formal negotiations between the International Monetary Fund (IMF) and a government delegation from Ghana on a bailout for the country’s economy begin today in Washington DC, USA.
Head of IMF’s Mission to Ghana, Joel Toujas-Bernate, has already met Ghana’s former Finance Minister Professor Kwesi Botchwey, who is lead negotiator for Ghana.
The two teams met in Accra in September to begin preliminary discussions for a possible Fund programme.
The negotiations are expected to end on Friday, October 17, this year.
The IMF indicated that Ghana’s current economic challenges would require extra measures from government to restore it.
Antoinette Sayeh, Director of African Department of the IMF, at a press conference, said the situation in Ghana was very difficult.
“The government put forward a demand to the IMF for a fund programme back in August. We’ve been working since then, to of course, be responsive to that request. And we’ve just had a mission come back from Accra in the first set of discussions toward a possible fund-supported programme,” Ms Sayeh said.
The government applied to the IMF to help it deal with the huge budget deficit, heightened inflation, huge wage bill and public debt in August.
“We certainly hope to be helpful to them with the programme, but that needs further discussions of course.”
The IMF is said to have rubbished macroeconomic targets and projections from the Bank of Ghana (BoG) and the government.
It indicated that Ghana cannot achieve single-digit inflation in 2015, adding that growth targets were overly ambitious.
The fund’s findings were revealed in the latest World Economic outlook report titled “legacies, clouds, uncertainties”.
The Fund said given the state of Ghana’s economy, single digit inflation might only be achieved in the next five years.
It also said inflation is expected to rise further this year and end at 18.5 percent.
The Fund also noted that inflation would average 16.8 percent in 2015 and decline to about 15.1 percent by the end of the next year.
Some analysts have argued that inflation, currently at 15.9 percent, could drop because of the harvest season.
