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On its initial review of Ghana’s program, the International Monetary Fund (IMF) has reached agreement at the staff level.
This has increased hope that the second $600 million tranche will be paid out under the program by November.
In May, Ghana and the IMF secured a Board-level agreement for a $2 billion bailout, with $600 million paid out at the start of the program. However, the ability of the nation to achieve specific goals was a condition for further payments.
Stéphane Roudet, the head of the IMF delegation, stated in a press release following the meeting in Accra on Friday, November 6, 2023, “I’m very pleased to announce that the IMF staff and Ghanaian authorities have reached a staff-level agreement on the first review of Ghana’s economic program under the Extended Credit Facility arrangement.
Once the required finance assurances have been acquired, this staff-level agreement is subject to IMF Management approval and Executive Board assessment. The required funding assurances would be provided by an agreement with official creditors on a debt treatment in accordance with program specifications.
Ghana would have access to SDR 451.4 million (about US$ 600 million) after the Executive Board review, bringing the total IMF financial support provided under the agreement since May 2023 to SDR 902.8 million (around 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. 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. Ambitious structural fiscal reforms are bolstering domestic revenues, improving spending efficiency, strengthening public financial and debt management, and enhancing transparency” he said.
“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.”
The Vice President Bawumia, the Finance Minister Ofori-Atta, the Governor of the Bank of Ghana, Addison, and his teams, as well as representatives from several government agencies, met with IMF staff.
The IMF team interacted with several stakeholders as well. The Ghanaian government and other peers have the staff’s gratitude for their ongoing openness and helpful involvement.
Source: Ghanatodayonline.com
