IMF Ghana Funds Said to Rest on Meeting Election-Year Budget

  • Lender seeks guarantees Ghana won’t use central bank funding
  • IMF due to release payment of $115 million under debt program

The International Monetary Fund wants assurances from Ghana that the country will adhere to budget targets ahead of elections scheduled for December, before the lender will release a further payment of $115 million under a bailout plan agreed last year, according to two people familiar with the matter.

The IMF seeks a guarantee that Ghana won’t use funding from the central bank, said the people, declining to be identified because talks are private. Ghana’s budget deficit in its previous election in 2012 was 12.1 percent of gross domestic product. The government’s deficit for the period from January to May this year was 2.5 percent, against a target of 2.2 percent.

Ghana’s Finance Minister Seth Terkper didn’t answer calls or return a text message seeking comment. Osa Ahinakwah, a spokesman for the IMF in the capital, Accra, didn’t return calls seeking comment.

President John Dramani Mahama was forced to turn to the IMF in February 2015 after ballooning government debt and falling export revenue triggered a 31 percent plunge in the currency against the dollar in the year before. Ghanaian lawmakers passed legislation last month that allows the government to borrow as much as 5 percent of the previous year’s revenue from the Bank of Ghana, contrary to the Washington-based lender’s demand for zero financing.

The IMF expects to conclude the third review of its program with Ghana by the middle of September, the lender said Tuesday in a statement on its website.

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