The International Monetary Fund (IMF) and Ghana have reached a staff-level agreement regarding economic policies and reforms to conclude the first review of Ghana’s three-year program under the Extended Credit Facility.

According to the fund, performance with respect to the program’s targets and reform objectives has been very strong. As such, Ghana will access to about US$600 million in financing once the review is approved by IMF Management and formally completed by the IMF Executive Board. To ensure the timely completion of the review, the country needs official creditors to quickly reach an agreement on a debt treatment in line with the financing assurances they provided in May 2023.

In a statement, IMF said Ghana’s strong policy and reform commitment under the program 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.

An International Monetary Fund (IMF) staff team, led by Mr Stéphane Roudet, Mission Chief for Ghana, held meetings in Accra from September 25 to October 6, 2023, to discuss progress on reforms and the authorities’ policy priorities in the context of the first review of Ghana’s three-year program under the Extended Credit Facility. The arrangement was approved by the IMF Executive Board for a total amount of SDR 2.242 billion (US$ 3 billion) on May 17, 2023. The team also conducted the 2023 Article IV consultation.

At the end of the mission, Mr. Roudet in a statement said “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 program 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 program parameters would provide the needed financing assurances. Upon completion of the Executive Board review,

“Ghana would have access to SDR 451.4 million (about US$ 600 million), bringing the total IMF financial support disbursed under the arrangement, since May 2023, to SDR 902.8 million (about US$1,200 million). 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.”
Stéphane Roudet

Reforms Already Generating Positive Results

Mr. Roudet noted that 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.”
Stéphane Roudet

On the revenue side, Mr. Roudet noted that Ghana has met its non-oil revenue mobilization target. Ambitious structural fiscal reforms are bolstering domestic revenues, improving spending efficiency, strengthening public financial and debt management, and enhancing transparency.

“In light of Ghana’s compelling performance under the Fund-supported program, the critical next step is to secure an agreement with official creditors on the terms of a debt treatment consistent with the IMF Executive Board-approved program parameters and debt targets. We urge official creditors to move forward and agree on an appropriate debt treatment in line with the financing assurances they provided in May 2023.”
Stéphane Roudet

Meanwhile, the IMF staff held meetings with Vice President Bawumia, Finance Minister Ofori-Atta, and Bank of Ghana Governor Addison, and their teams, as well as representatives from various government agencies. The IMF team also engaged with other stakeholders. Staff would like to express their gratitude to the Ghanaian authorities and other counterparts for their continued open and constructive engagement.