Approval Will Solve Inflation And Cedi Depreciation- IMF

The International Monetary Fund Mission Chief for Ghana, Mr Stéphane Roudet, has confirmed the bailout will solve the country’s fiscal and debt vulnerabilities.

Ghana has been locked out of the international market and facing multiple fiscal challenges including dwindling international reserves, Cedi depreciation, rising inflation and plummeting domestic investor confidence.

This compelled the government to seek IMF’s intervention last year.

On Wednesday, May 17, the IMF approved the request for a US$3 billion bailout enabling the disbursement of an initial US$600 million.

During a joint press statement, Mr Roudet said the approval will in many ways solve these fiscal challenges.

He explained, “On the inflation side, the substantial and ambitious Fiscal Consolidation programme that the Ghanaian government has embarked on. Of course, will help reduce pressures on prices and contribute to controlling and bringing inflation further down.

“The second thing is the bold steps taken by the Bank of Ghana in raising interest rates and eliminating financing deficit both policies are very critical to bring inflation down that has started bearing fruit.

“On the reserve side, many aspects will contribute to increasing reserves. The policy will help improve the external position. It will help contribute turn the bills from import. Financing from the IMF will help catalyse through the IMF programme from other backlogs that will all contribute to boosting the international reserve position of Ghana.”

Ghana’s inflation stands at 41.2% down from 54.1% in December 2022.

Ghana is yet to finalise negotiations and agreements with external creditors.