Ghana can do without Extended Credit Facility - IMF

IMF’s Managing Director says if assurances by the President and his economic management team are upheld, Ghana can proceed on the path of development successfully without an Extended Credit Facility (ECF) from the Fund.

Christine Lagarde said the country has the potential to run an effective economy devoid of an IMF programme.

“You know your country better than I do, it seems to me on the face of it, particularly if the resolve that I have heard from the President, from the Vice-President, from the Finance Minister, from the Governor, if there is that resolve to actually stay the course and maintain that fiscal discipline, I think the country has everything it takes to do without an IMF programme,” she said at a forum in Accra on Tuesday, 18 December 2018.

Photo: Ms Lagarde arrived in Ghana on Sunday, December 16 for a three-day visit

Her comments come ahead of Ghana’s scheduled exit from the IMF programme by the close of 2018. Ghana entered into an External Credit Facility with the IMF for economic help in 2015 with funding support of $918 million. The governing New Patriotic Party (NPP) has, however, announced that it will be moving away from such deals with the IMF.

Ms Lagarde told a gathering of government agencies, personnel from the central bank, private sector, think tanks, civil society, NGOs and the academia that she is hopeful that there would not any significant external shocks, whether it is sharp and durable drop in commodity prices or massive increases in tensions, that could hamper any trade.

“I hope that doesn’t happen because if it did, then clearly not just Ghana but quite a few countries would need our help and we stand ready,” she said.

“We need to be ready and available for that. I think in addition to political maturity, I think that fiscal responsibility can be developed and it requires buying and it requires explaining, but I think it’s in the seeds of the tree that you are nurturing,” she added.