In a recent press briefing, Bank of Ghana (BoG) Governor Ernest Addison announced that the country has seen its first streaks of improvement in its economy following the implementation of economic reform programs within four months.
The International Monetary Fund (IMF) mandates these reform programs and policy adjustments to governments that approach it for loans to help the country overcome the problems that led it to seek financial assistance.
- The BoG Governor said the country’s economy grew by 3.2% in the second quarter after recording a 3.3% increase in the first quarter, which surpassed the 1.5% growth target set in the IMF program.
- He attributed the economic recovery to a stabilized exchange rate regime and an increase in consumer and business sentiments, and it is projected to continue throughout the year in line with improving macroeconomic conditions in the country.
What was said
“We are projecting possibly a 3.0 percent growth this year, almost double the projected growth rate under the IMF program,” Adisson said.
- Ghana approached the IMF for a bailout following protracted economic woes worsened by the covid-19 pandemic and the Russia-Ukraine conflict.
- In December 2022, the IMF reached a staff-level agreement with Ghana on a three-year extended credit facility worth $3 billion. A deal premised on the country’s implementation of specific economic policies.
- These policies included restructuring the country’s internal debt and stopping the government from borrowing from the central bank. Ghana reportedly signed a memorandum of understanding in agreement with the terms.
- The IMF disbursed $600 million from the $3 billion extended credit facility in May.
Why this matters
- The BoG announced that the launch of its digital currency, the eCedi, has been delayed due to the ‘dislocation’ of the country’s economy, the bank’s governor said.
- The eCedi is expected to be a digital version of the cedi, which is convertible to cash or deposit money at a 1:1 ratio.
- An improved economy could help further plans to launch the digital currency.