IMF begins talks with government on economy, 2025 Budget from today

 

An International Monetary Fund (IMF) team will from today February 10, 2025 begin series of engagements with government about the economy.

The discussions will center on the economy and the 2025 Budget, which sources say will be presented in Parliament in March 2025.

Other issues on the agenda during the five-day visit and meetings will be an assessment of progress made by government on negotiations with External Commercial Creditors and the Energy Sector debts. 

In addition, the IMF would seek some clarity on government’s plans to deal with the country’s energy situation and talks about privatising parts of the Electricity Company of Ghana's (ECG) operations.

Fourth Review and IMF visit

Sources have told JOYBUSINESS the visit is not a Review Mission, but an engagement that will focus mainly on the economy and the 2025 Budget.

The IMF is expected to carry out the fourth review of Ghana’s programme later this year.

The review, will be based on fiscal data on the economy ending December 2024.

2025 Budget and discussions on the economy

As part of the assessment, the IMF will ensure that the 2025 Budget is in line with the Fund’s programme with Ghana, particularly to improve revenue mobilization.

Ghana’s programme with the IMF is centered on revenue mobilization and reducing the country’s debt stock to sustainable levels.

Sources say the team will for instance seek clarity on government’s plans to fill the revenue hole that will be created, if the Finance Minister, Dr. Ato Forson goes ahead to remove taxes like the Betting Tax, Covid-19 Levy and the E-Levy.

It is estimated that Ghana could lose about 10 billion cedis every year, if the Finance Minister goes ahead to remove the taxes.

Also, the team will seek more answers on plans to re-set the economy and its impact the overall programme.

Programme Extension and more funding from the IMF

Dr.  Forson recently disclosed plans to push for an extension of the programme to seek additional funds to help stabilize the economy.

The visit will therefore offer both government and the IMF an opportunity to finalize discussions on this proposal.

The IMF has maintained that even though it is opened to talks aimed at reviewing the programme, any agreement that will be reached, must be in line with the broader focus of the programme.

Ghana’s Programme with the IMF

Since Ghana signed up to the IMF programme in May 2023, it has received about US$1.9 billion to support the economy.

The IMF in a statement after Ghana passed the third review, described the programme performance as generally satisfactory, with remarkable progress on debt restructuring.

Economic growth in the first half of 2024 exceeded expectations, inflation has continued to decline, and the fiscal and external positions have showed marked improvements”, it added.