ACCRA (Reuters) - The International Monetary Fund (IMF) approved an extension of an aid package for Ghana initially worth $918 million that will see the program continue for an extra year beyond its original April 2018 end date, it said on Wednesday.
The decision was made during a meeting of the Fund’s executive board that also approved a tranche of $94.2 million in balance of payment support following the fourth review of the West African nation’s program.
Ghana, which exports cocoa, gold and oil, signed onto the program in April 2015 hoping to restore fiscal balance to an economy dogged by budget deficits, rising public debt and inflation.
Wednesday’s successful review had been delayed after the new government of President Nana Akufo-Addo opened new negotiations with the IMF aimed at getting the program back on track after it suffered significant setbacks last year.
“The authorities have taken some encouraging steps and the economy is showing signs of recovery,” the IMF said in a statement.
It called for additional efforts to address revenue shortfalls and full enforcement of expenditure control measures to contain spending and prevent the recurrence of domestic arrears.
Ghana should also tackle energy sector inefficiencies, particularly improving the management of the state-owned enterprises, the statement added.
Deputy Finance Minister Charles Adu Boahen praised the thumbs up from the board.
“It’s positive news. The government team has worked really hard on ensuring that we met all the prior actions before the deadline,” Boahen said.
The extension of the program puts to rest uncertainties created by Akufo-Addo’s announcement in July that Ghana would not seek an extension, a pronouncement that ruffled markets and led to sharp decline of the local currency.
Reporting by Kwasi Kpodo; Editing by Joe Bavier and David Gregorio