Dr. Cassiel Ato Forson
The Minister of Finance, Dr. Cassiel Ato Forson, has stated that the country is likely to miss out on the International Monetary Fund (IMF) structural benchmarks due December 2024.
He further added that this would be assessed by the staff in the upcoming 4th review of the programme in April 2025.
The Minister who revealed this when he presented the 2025 budget statement and economic policy in Parliament said the structural benchmarks include performance indicators such as primary balance, inflation, and social protection spending.
He said, “Inflation worsened in 2024 from 23.2% in 2023 to 23.8% in 2024. The 2024 end-period inflation also exceeded the budget target of 15% by 8.8 percentage points and the IMF central target of 18% by 5.8 percentage points. This has triggered a discussion with the IMF under the Monetary Policy Consultation Clause” he stated.
The Minister stated that the primary balance on a commitment basis also worsened from a deficit of 0.2% of GDP in 2023 to a deficit of 3.9% in 2024 while the primary balance on a commitment basis target for 2024 recorded a surplus of 0.5% of GDP.
“The previous government recorded a deficit of 3.9% of GDP. This represents a slippage of a whopping 4.4 percentage points,” he noted.
According to the Minister, due to the bilateral creditor debt restructuring undertaken by the previous administration, 55 projects have been suspended leaving an amount of US$3 billion in undisbursed loans and about US$300 million in outstanding interim payment certificates (IPCs).
Among some of the projects he mentioned are Effia Nkwanta Regional Hospital, Kejetia Market Phase Bolgatanga-Bawku Pulimakom road project, and Tema-Aflao road project.
He further indicated that delayed payments and demobilization from the site could result in cost overruns of about US$1.1 billion as the IMF-supported programme imposes an annual disbursement ceiling of US$250 million for official bilateral loans.
“This constraint means that it will take a minimum of 12 years from the recommencement of disbursements to complete these 55 stalled projects. We will be engaging in the coming days to resolve this,” he added.
By Ebenezer K. Amponsah