IMF Approves One-Year Extension to Ghana’s Credit Program
- Lender’s prolonged stay gives comfort to market: RMB
- Budget deficit forecast to narrow to 6.3% of GDP this year
Road traffic passes business advertisements for Zenith Bank Plc and MTN Group Ltd. sit on a busy highway in Accra, Ghana.
Photographer: Ty Wright/Bloomberg via Getty ImagesThe International Monetary Fund approved a one-year extension of its credit-facility program with Ghana, lengthening the lender’s economic oversight of the West African nation which is battling to keep spending under control. The country’s Eurobonds rallied.
The extension follows after the IMF completed a fourth review of an almost $1 billion assistance program with Ghana agreed to in April 2015, when chronic overspending and power cuts drained public finances and caused inflation to soar. Ghana’s budget deficit for 2016 was 9.3 percent of gross domestic product compared with an initial target of 5.3 percent under the IMF program while debt soared to 73.3 percent of gross domestic product. The budget shortfall is forecast to narrow to 6.3 percent this year.