Ghana to access second tranche of $3b IMF loan after review approved by Management of Fund
The International Monetary Fund (IMF) has announced that Ghana could access the second tranche of $600 million of the $3 billion Extended Credit Facility (ECF) approved by the IMF Executive Board on May 17, 2023. The IMF made this announcement after IMF staff and the Ghanaian authorities reached staff-level agreement on economic policies and reforms to conclude the first review of the 36-month ECF-supported programme.
“Performance with respect to the programme’s targets and reform objectives has been very strong,” the Fund said.
According to the Fund, Ghana will have access to about $600 million in financing once the review is approved by IMF Management and formally completed by the IMF Executive Board.
It added also that to ensure timely completion of the review, Ghana needs official creditors to quickly reach agreement on a debt treatment in line with the financing assurances they provided in May 2023.
The IMF staff team, led by Stéphane Roudet, Mission Chief for Ghana, held meetings in Accra from September 25 to October 6, 2023, to discuss progress on reforms and the Ghanaian authorities’ policy priorities in the context of the first review of the country’s three-year programme under the ECF. The team also conducted the 2023 Article IV consultation.
The Fund acknowledged that the authorities’ strong policy and reform commitment under the programme is bearing fruit, and signs of economic stabilization are emerging.
“Growth in 2023 has proven more resilient than initially envisaged, inflation has declined, the fiscal and external positions have improved, and the exchange rate has stabilized,” the Fund said in a statement.
“I’m very pleased to announce that the IMF staff and Ghanaian authorities have reached a staff-level agreement on the first review of Ghana’s economic programme under the Extended Credit Facility arrangement. This staff-level agreement is subject to IMF Management approval and Executive Board consideration once the necessary financing assurances have been received. An agreement with official creditors on a debt treatment in line with programme parameters would provide the needed financing assurances. Upon completion of the Executive Board review, Ghana would have access to about $600 million, bringing the total IMF financial support disbursed under the arrangement, since May 2023, to $1,200,000.
“Faced with an acute economic and financial crisis, the authorities have adjusted macroeconomic policies, successfully completed their domestic debt restructuring operation, and launched wide-ranging reforms. These actions are already generating positive results, as growth in 2023 has proven more resilient than initially envisaged, inflation has declined, the fiscal and external positions have improved, and the exchange rate has stabilized.
“Consistent with the authorities’ commitments under the Fund-supported program, fiscal performance has been strong, and Ghana is on track to lower the fiscal primary deficit on a commitment basis by about 4 percentage points of GDP in 2023. Spending has remained within program limits. To help mitigate the impact of the crisis on the most vulnerable population, the authorities have significantly expanded social protection programs. On the revenue side, Ghana has met its non-oil revenue mobilization target,” Roudet said in a statement.
At the time Ghana went to the Fund, the economy was barely doing well, with the currency, the cedi, literally on life-support and doing badly against the US dollar. With inflation at an all-time high at almost 27 per cent and public debt almost at 80 per cent, the government had no choice, after consistently claiming the economy was doing well, and saying the country would not go to the IMF.
By Emmanuel K Dogbevi
Copyright ©2023 by NewsBridge Africa
All rights reserved. This article or any portion thereof may not be reproduced or used in any manner whatsoever without the express written permission of the publisher except for the use of brief quotations in reviews.