Mohammed Amin Adam, a minister of state in the finance ministry has disclosed that Ghana expects the IMF to approve a first loan tranche of $600 million as soon as Wednesday, setting the path for delivery within a week.
IMF Managing Director Kristalina Georgieva said on Friday that Ghana’s official creditors had given the required financing assurances for the IMF Executive Board to look at signing off on the loan, which Ghana is requesting from the Fund in the amount of $3 billion to support its devastated economy.
“We expect a deal on Wednesday. With the disbursement, there is going to be $600 million as a first tranche just immediately after the approval.”
Mohammed Amin Adam
According to him, second tranche of $600 million is expected to be approved after a successful first review of the programme, which took place sometime in November or December, with the rest disbursed in equal tranches of $360 million after semi-annual reviews.
The funds, he said, will boost Ghana’s coffers and help it work towards the target of foreign reserves amounting to the equivalent of three months of imports by 2026.
Ghana, a country with already-strained finances, risks a debt overhaul after its finances collapsed amid the economic effects of COVID-19 and Russia’s invasion of Ukraine, along with some other smaller, riskier emerging countries like Zambia and Sri Lanka.
Approximately $5.4 billion of debt to official creditors and $14.6 billion of debt to private foreign creditors have been designated for restructuring, according to government data.
Ghana’s Engagement With World Bank
According to the minister, he expects negotiations with both sets of creditors to go well once the IMF signs off on the loan.
“Confidence is going to be restored and we expect that stakeholders will cooperate and will be encouraged to negotiate favourable terms with us. The date for talks had not yet been set for either group.”
Mohammed Amin Adam
Ghana has also resorted to the World Bank in its fight to end its worst economic crisis in a generation and restore macroeconomic stability, which has sparked protests over the skyrocketing cost of living.
Adam said the government was far along in talks with the World Bank to provide additional support of $900 million to be disbursed in three equal instalments of $300 million over three years.
“We are far advanced, almost concluding negotiations.”
Mohammed Amin Adam
The World Bank has also agreed to support a financial sector stability fund with $250 million to help Ghana address the insolvency and liquidity challenges following a domestic debt exchange programme, which has affected some domestic banks.
Adam said the government was also in talks with the African Development Bank for over $100 million for the stability fund.
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