By Umaru Sanda Amadu
ACCRA
The Ghanaian government said Friday that it expected a $918-million financial assistance package from the International Monetary Fund (IMF) to boost investor confidence in the West African country's economy.
In a statement, the Finance Ministry said it expected the financial assistance package to "boost grant disbursements from development partners, improve macroeconomic stability, and help support the credibility of government policies."
The release was issued after the IMF's executive board approved a three-year Extended Credit Facility (ECF) program for Ghana earlier on Friday.
The deal comes following months of talks that began in August 2014 between an IMF team and Ghanaian officials in capital Accra.
According to the government, four rounds of negotiations have been held with the IMF, along with additional discussions via video conference and email exchanges.
Earlier this year, the government reached a staff-level agreement with the IMF, which is now awaiting the executive board's approval.
"The IMF program will be implemented over a period when the economy's short- and medium-term prospects remain strong, supported by potential for further oil and gas exploration and production," the statement, signed by Finance Minister Seth Tekper, read.
It expressed optimism that the factors outlined above would "put the economy on a strong growth trajectory again when imbalances are addressed."
Since 2012, the Ghanaian economy has come under severe stress due to both global and domestic factors, resulting in high fiscal and current-account deficits.
In order to address macroeconomic imbalances, the government says it has adopted "ambitious and comprehensive stabilization and reform programs."
While the measures have helped improve the situation, the government nevertheless insists that "new and continuing adverse global and domestic developments continue to pose challenges to economic management."
"Prices for Ghana's key commodities, especially gold and cocoa, have declined, giving rise to a worsened external sector performance and rapid currency depreciation," the statement read.
"In addition," it added, "gas supply disruptions have affected energy supply with its attendant effects on economic activity."
The challenges forced the minister to present a statement to parliament last month on the impact of declining crude oil prices on Ghana's 2015 budget.
According to Tekper, a number of ongoing structural reforms, along with some new ones, will be implemented under the program.
The reforms, the minister noted, "are mainly in the areas of revenue administration, tax policy, public financial management, payroll and human resource management, public sector reforms, debt management and supervision and regulation of the financial system."
He said additional initiatives had been taken aimed at strengthening institutions, as part of plans to carry on with the program.
