The Ministry of Finance has called on bilateral creditors to swiftly consent to the debt relief terms to help Ghana secure the second tranche of the $3 billion International Monetary Fund (IMF) bailout package.
According to the ministry, securing the agreement and the consensus from the creditors will bode well for the country. He expressed appreciation to the IMF for giving Ghana the needed support in its quest to help the economy to turn the corner.
“Great meeting with @KGeorgieva during the #IMFMeetings. Discussed recent achievement of SLA for first review. Grateful for strong IMF support and calling on bilateral creditors to agree on debt relief terms as quickly as possible. #GhanaRising”.Finance ministry
Meanwhile, the International Monetary Fund is anticipating the outcome of Ghana’s engagement with its bilateral creditors before releasing the next tranche of the $3 billion facility.
In a post today, October 11, 2023, IMF Managing Director, Kristalina Georgieva, expressed optimism following the IMF delegation team meeting Ghanaian officials to discuss the way forward. She highlighted the relevance of Ghana reaching an agreement with its external creditors.
“Great to meet @MoF_Ghana Min Ofori-Atta & @thebankofghana Gov Addison at #IMFMeetings. Congrats on the recent staff-level agreement on the Fund-supported program’s first review. Counting on bilateral creditors reaching agreement on debt relief soon to move the review forward.”Kristalina Georgieva
Relevance of Ghana bagging staff level agreement with IMF
Ghana recently reached a staff-level agreement with the IMF following a review of the country’s economic progress after the first tranche of $600 million was disbursed.
An 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 program earlier this month.
According to the IMF, performance with respect to the program’s targets and reform objectives has been very strong. Among other things, Ghana will have 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 timely completion of the review, IMF insists the country needs official creditors to quickly reach agreement on a debt treatment in line with the financing assurances they provided in May 2023.
Furthermore, IMF expressed that Ghana’s authorities’ strong policy and reform commitment under the program is bearing fruit, and signs of economic stabilization are emerging.
Growth in 2023, it highlighted, has proven more resilient than initially envisaged, inflation has declined, the fiscal and external positions have improved, and the exchange rate has stabilized.
Faced with an acute economic and financial crisis, IMF’s Mission Chief for Ghana, Stéphane Roudet, stated that the authorities have adjusted macroeconomic policies, successfully completed their domestic debt restructuring operation, and launched wide-ranging reforms.
These actions, he noted, 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.
Last month, ratings agency, Fitch, expressed optimism that Ghana will reach an agreement with the Official Creditor Committee by the end of 2023, and will pave way for the restructuring of the country’s external debt by middle of 2024.
The UK-based ratings agency revealed that this will be one of the quickest of the timeliness of the Common Framework in recent times.
Senior Director, Emerging Market and African Sovereign Ratings at Fitch Ratings, Toby Illes, speaking at the Africa Webinar Series titled ‘Reform and New Challenges in Western Africa’, stated that the design of the external debt programme will be a win-win for both the debtor and the creditor.