IMF postpone board meeting to review Ghana’s performance

The disbursement of the third tranche of IMF cash to Ghana before the end of this month might be under threat.

JOYBUSINESS has gathered that the board meeting which normally takes place in July 2016, to facilitate the disbursement of the tranche under the third review, has been rescheduled to the end of September.

Possibly, it could even take up to the first week of October, just a month before the 2016 General elections.

Going by past reviews and the time it usually take the country’s case to be presented to the Board, following successful conclusions of reviews and the per the original schedule slated for this third review, the board should have met, to review the country’s performance by end-June 2016 or at worst by the second week of July 2016.

This would have been the  fourth Board meeting in Ghana and the third review since  the country signed up to  the IMF program .

Certain difficulties in implementing reforms that could not be concluded at the April 2016 review still remains outstanding.

JOYBUSINESS understands that government is currently working  address data reconciliation, developing plans and strategies to State Owned Enterprises that have taken loans from the banking system and the passage of important bills by parliament to make the central bank more independent.

It is not yet clear how long it will take for these actions to be met to satisfy the IMF.

But sources say the issues are deep and structural and centre on the main pillars on which the program anchors were formulated.

In a response to questions sent to the IMF in Washington DC,  by JOYBUSINESS, inquiring about the status of the board meeting in Ghana, the fund in its responds noted that, “As per the mission that was held April 27-May 11, IMF staff have reached a general understanding with the authorities on the main elements that would support the completion of the third review under the Extended Credit Facility (ECF)-supported program, including the prior actions to be implemented before the review can be completed.

The FUND further added that although, authorities have continued work in few areas including , including a new Public Financial Management Law, an Amended Bank of Ghana Act, a strategy to address the debt of State Owned Enterprises, and reconciliation of fiscal accounts for 2015,  the IMF  staff  can only finalize the required documentation for the Executive Board’s review “Subject to above  work being completed”.

According to the IMF,  ” Following the expected implementation of the prior actions, including adoption by Parliament of the new Public Financial Management Law and Amended Bank of Ghana Act, as well as clarification on the financial situation of SOEs to ensure that there would be no financing shortfall for the public sector, the IMF Executive Board could consider the review during the next quarter of this year”.

Some analysts say , the delay could have serious implications on the economy, as it may affect plans by government to issue the country’s fourth Eurobond , which has been slated to come on very soon.

The bond issue and the price that the country will get will depend on a successful and timely review. This is  needed to convince investors and donors that government has made some progress in stabilizing the economy.

The delay may also affect plans by the Finance Minister Seth Terkper to present the midyear review to parliament, possibly this month.

The following weeks will be interesting to watch  as to how the IMF and the Government collaborate to reassure investors on the progress of work.

Source: Ghana| | Joy Business

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