After several meetings, the International Monetary Fund (IMF) has agreed to support Ghana with US$360 million.
In a statement issued on Saturday, April 13, 2024, the IMF announced that Ghana is set to receive approximately US$360 million in funding once the agreement undergoes approval by IMF Management and is formally finalized by the IMF Executive Board.
The IMF praised Ghana’s performance under the program, describing it as “strong.” This decision comes after a series of meetings held in Accra between April 2-12, 2024, led by Mr. Stéphane Roudet, Mission Chief for Ghana, and his IMF team.
In attendance were Finance Minister Adam Amin, Bank of Ghana Governor Ernest Addison, and their teams, as well as representatives from various government agencies. The IMF team also engaged with other stakeholders.
These meetings were aimed at evaluating Ghana’s progress on reforms and discussing the government’s policy priorities within the context of the second review of Ghana’s three-year program under the Extended Credit Facility.
Mr. Stéphane Roudet said, “I am pleased to announce that IMF staff and the Ghanaian authorities have reached a staff-level agreement on the second review of Ghana’s economic program under the Extended Credit Facility arrangement.”
However, this staff-level agreement is subject to IMF Management approval and Executive Board consideration once the necessary financing assurances have been received.
“Performance under the program has been generally strong, with most quantitative objectives met and key reforms implemented. The authorities’ strong policy and efforts have continued to yield positive results: economic growth is higher than initially expected; inflation has continued to decline; and both fiscal and external positions have improved significantly in 2023.”
IMF statement
Success Depends on Agreement with Bilateral Creditors
To make sure that the review process stays on track, Ghana and its official bilateral creditors must agree on a Memorandum of Understanding (MoU) for managing the country’s debt. This MoU should align with the agreement in principle that was reached back in January 2024.
If Ghana and its official creditors can agree on an MoU that fits the parameters of the program, it would provide the necessary assurances for financing.
Once the Executive Board review is completed, Ghana will gain access to SDR 269.1 million (equivalent to about US$360 million). This would bring the total amount of financial support from the IMF disbursed under the arrangement since May 2023 to SDR 1,171.9 million (approximately US$1,560 million).
The statement stated that economic activity in 2023 was stronger than expected, leading to upward revisions in growth projections for 2024. Also, monetary policy has been appropriately tight, resulting in a rapid decline in inflation rates.
Regarding fiscal matters, the government has adhered to its commitments outlined in the IMF-supported program. The fiscal primary balance, measured on a commitment basis, saw an improvement of over 4 percentage points of GDP in 2023.
Furthermore, it is projected to achieve a fiscal primary surplus of 0.5 percent of GDP in 2024, in line with the authorities’ targets.
The statement emphasized that spending has remained within budget limits, while the authorities have significantly expanded social protection programs to help mitigate the impact of the crisis on the most vulnerable.
Moreover, Ghana met its non-oil revenue mobilization target, while making progress in implementing ambitious structural fiscal reforms to bolster domestic revenues, strengthen public financial and debt management, and enhance transparency.
“The external sector has improved significantly, with international reserve accumulation ahead of program objectives. Financial stability has been preserved, with banks posting solid profits in 2023.”
IMF statement
The IMF team expressed gratitude to the Ghanaian authorities and other counterparts for their continued open and constructive engagement.
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