The Executive Board of the International Monetary Fund (IMF) has approved the staff level agreement Ghana reached with officials of the Fund after the second review of the country’s $3 billion extended credit facility on 13 April 2024.
The IMF Board approval on Friday 28 June, 2024 essentially paves the way for the release of some $ 360 million to boost the economy.
The funds are expected to hit the account of the Bank of Ghana (BoG) today Monday, 1 July 2024.
The decision comes after the country finalised a deal with its official creditor committee – a step that had been a pre-requisite to unlock the second tranche of the IMF $3 billion support for the nation’s post COVID-19 economic recovery programme (PC-Peg).
The new tranche of $360 million will take the total IMF disbursements under the three-year programme designed to help Ghana out of its economic challenges to about US$1.6 billion.
In a statement issued on Friday, the IMF said, “Ghana’s economic reform programme is delivering on its objectives. Following acute economic and financial pressures in 2022, the Fund-supported program has provided a credible anchor for the government to adjust macroeconomic policies and implement reforms to restore macroeconomic stability and debt sustainability, while laying the foundations for higher and more inclusive growth.”
“These efforts are paying off, with growth proving more resilient than initially expected, inflation declining at a faster pace, and the fiscal and external positions improving. The medium-term outlook remains favourable but subject to downside risks—including those related to the upcoming general elections,” the statement added.
According to the Bretton Woods Institution, the country’s performance under the programme has been generally strong.
“All quantitative performance criteria for the second review and almost all indicative targets were met. Good progress has also been made on the key structural reform milestones, despite some delays,” the statement added.
The IMF stated that “Ghanaian authorities have also continued to make progress on their comprehensive debt restructuring.”
On 11 June 2024, Ghana reached an agreement with the Official Creditor Committee (OCC) under the G20’s Common Framework on a Memorandum of Understanding (MoU) formalising the agreement in principle on a debt treatment, which was reached in January 2024.
This agreement on a debt treatment, consistent with the programme parameters, provided the financing assurances necessary for the second review under the ECF Arrangement to be completed.
The country has also recently reached agreement in principle with representatives of Eurobond holders on a restructuring consistent with programme parameters, subject to confirmation on comparability of treatment by the OCC.
