A new analysis suggests Ghana’s 2015 International Monetary Fund (IMF) programme deviated more significantly from its targets than the current 2023 programme. The report compares performance data from both agreements. It highlights differing degrees of adherence to economic goals.
The analysis, authored by Issah Fuseini, spokesperson for the NPP Policy Committee on Finance and Economy, indicates that the 2015 Extended Credit Facility (ECF) programme experienced a more severe breakdown. This occurred despite facing similar election-cycle spending pressures and implementation challenges common to IMF-supported arrangements. The scale of missed targets under the 2015 programme was notably worse.
This comparison arises amidst ongoing political debate about Ghana’s current IMF programme. Critics have claimed election year spending has derailed progress. However, Fuseini’s report contends that available IMF data does not support this conclusion when set against the performance of the 2015 programme. Historically, governments commit to fiscal targets but weaken implementation during election periods.
The report specifically details the 2015 programme’s struggles. Ghana entered this arrangement during a difficult economic period. High inflation, a depreciating cedi, large fiscal deficits, and a power crisis marked that time. The programme aimed to restore stability through spending controls and revenue measures. By the IMF’s Fourth Review in 2017, Ghana had missed most key targets. By September 2016, 8 out of 14 targets were missed.
Critical indicators like the primary fiscal balance and net international reserves floor were not met. Social spending targets also fell short. This raised concerns for vulnerable populations. The analysis contrasts this with the 2023 ECF’s performance. While this programme also saw some slippages, its core objectives remained largely on track.
According to Fuseini's analysis, all binding performance criteria for end-December 2024 were met under the 2023 ECF. Only two out of eleven monitored indicators were missed. This included elevated inflation, reaching 23.8 per cent, exceeding the programme’s limit. Government also accumulated GHS 45.604 billion in payables against a zero ceiling. These were often from spending outside the GIFMIS system.
However, the report stresses that crucial elements like reserves, debt ceilings, and central bank financing were maintained. Ghana exceeded its net international reserves target, reaching US$1.719 billion by end-2024. This contrasts sharply with the 2015 programme, which failed its net international reserves target. Bank of Ghana financing of government also remained at zero in both programmes.
The report highlights stronger institutional compliance with ceilings on Bank of Ghana claims on government in the 2023 programme. Debt management also saw better adherence to external borrowing limits and overall debt ceilings. These factors suggest a more robust performance under the current IMF arrangement despite election year pressures.