The Governor of the Bank of Ghana (BoG), Dr Ernest Addison, has described the International Monetary Fund (IMF) approval of the $3 billion Extended Credit Facility (ECF) for the country as a positive development for the domestic economy.

"The approval of the US$3 billion ECF arrangement has reinforced recovery efforts at restoring macroeconomic stability and debt sustainability. This should further help re-establish investor confidence in the domestic economy," he stated during a press conference in Accra on Monday, after the 112th regular meeting of the Monetary Policy Committee (MPC) of the Bank of Ghana (BoG).

He explained that approval of the facility was good for the country but not a magic wand to turn the economy around.

"The programme is conditional on a strong implementation of the fiscal and structural policies under the programme going forward. This includes structural reforms on tax policy, revenue administration, and public financial management to boost revenues and reposition fiscal policy implementation on a consolidated and sustainable path," he said.

Dr Addison said the first tranche of $600 million of the ECF disbursed to the country and which had hit the account of the BoG, in the short to medium term, would help address the forex challenges facing the country.

"The IMF support is not a solution to the forex challenge facing the country. It will help meet our forex liquidity and anchor exchange rate expectations," said the Governor of BoG.

He said the amount was not meant for balance of payment, but would be used to finance the 2023 budget.

"The IMF has made it clear, the first tranche of $600 million is for budget support and the BoG will give the government the Cedi equivalent of the amount," Dr Addison stated.

"In the long term, the country has to promote production to increase the country's exports to attract more foreign exchange into the country," he added