A country mission of the International Monetary Fund said on Friday that Ghana has managed its COVID-19 outbreak very effectively and its economy is rebounding with the support of strong policies.
“Policy interventions in 2020 were also critical to safeguard livelihoods and paved the way for a faster rebound of economic activity,” said Carlo Sdralevich, the mission head, in a statement following virtual meetings ended on May 12.
He said last year’s government actions to contain the pandemic also exacerbated pre-existing budget constraints and public debt vulnerabilities.
“The 2021 budget’s recent policy pivot towards fiscal consolidation is an important step in the right direction and a difficult one in a pandemic,” said Sdralevich.
Fiscal consolidation should focus around debt and debt service reduction while allowing for social, health, and development spending, he added.
The West African country owes the Fund about $2 billion, including US$1B in pandemic aid funding received in April 2020.
Ghana spends roughly half of its revenue on interest payments, with total debt rising near 80% of GDP. It has nearly US$33B in marketable debt according to Refinitiv data, of which over US$13B is dollar-denominated.