Minister for Finance Dr Mohammed Amin Adam has stated the International Monetary Fund (IMF) and the World Bank have both confirmed the ongoing economic recovery the country is currently experiencing.
He said the two Bretton Woods Institutions have pledged their unflinching support to ensure that Ghana makes a full recovery following the shocks the economy encountered as a result of the COVID-19 pandemic and other geo-political challenges such as the Russian invasion of Ukraine.
Addressing the press at the head office of the World Bank in Washington DC on 21 April 2024 at the end of the 2024 Spring Meetings of the International Monetary Fund (IMF), Finance Minister, Dr Mohammed Amin Adam noted in his initial remarks that since Ghana secured a US$3 billion dollars extended credit facility from the IMF in May 2023, coupled with the sound policies government set down for implementation, the economy has been on a path of recovery and the same has been recognized by the IMF, the World Bank and other development partners throughout team Ghana’s engagements at the 2024 Spring Meetings.
Dr Amin Adam in his submission observed that the government’s interventions over the last year since the country secured the US$3 billion IMF programme have been tailored to ensure that the economy recovers and he can report that the recovery is happening and at a record rate as alluded to by the IMF, the World Bank and some other development partners of the nations.
“In the last week, I held bilateral meetings with our development partners, creditors, bondholders, donors and other development partners as well as investors and I can tell you that these discussions were largely very positive for us. I have consistently used the opportunity during these meetings to tell the story about the progress we are making in Ghana to restore microeconomic stability and build resilience.
“We met with officials of the IMF and we met with the IMF managing director, Kristalina Georgieva. Since the [IMF] programme approval, we have implemented many policies that we have negotiated with the fund and the results are positive, the results again show that we are performing better than anticipated,” the Finance Minister, Mohammed Amin Adam said.
“On economic growth, our performance ended the year 2023 at 2.9%. this compared with the original target of 1.5% and the revised target of 2.3%, shows that growth has been robust and therefore, the recovery has been very strong. Inflation declined by 30.9 percentage points from 54% end of 2022 to currently 25.8%, in March 2024.
“The cedi has also stabilised against major currencies. This year, year to date 2024, the cedi depreciated by just 8.3% compared with 21.5% same time in 2023 and that tells you that the cedi continues to be stronger and stronger.
“This is not surprising because it is a result of the strong monetary policies from the Bank of Ghana and also from the building of our gross international reserves as well as the interventions by the Ministry of Finance on the expenditure side” Dr Amin Adam added.
The Finance Minister in his statement noted that the remarkable performance resulted in a successful discussion with the IMF in Ghana which led to the country securing a staff-level agreement that essentially paved the way for Ghana to go through the second review of the fund.
He added on the strength of the strong economic performance, he is confident that Ghana will secure a board-level approval for the release of the third tranche of US$360 million which will bring Ghana’s total disbursement from the IMF to US$1.5 billion.
“This is remarkable because many people thought that with the kind of difficulties that we face in our economy, because of the external shocks and also because of domestic vulnerabilities, we were not going to be successful with the implementation of the policies that had been negotiated with the [IMF],” the Finance Minister remarked.
“I can tell you that the Fund is pretty happy and they are very positive about our performance. We will continue to do the best we can under the leadership of our President, Nana Addo Dankwa Akufo-Addo, and to give a good account of ourselves in the management of the economy” he further remarked in his statement to the press in Washington DC.
“All in all, it has been a very productive Spring Meeting, and for Ghana in particular, we have received assurances from our development partners of their continued support that will help us accelerate our economic growth in Ghana and keep the IMF programme on course,” Mohammed Amin Adam, the Finance Minister added.
By way of summary, the Finance Minister noted that he and his delegation will be returning to Ghana “to continue with implementing government’s PC-PEG programme to sustain the growth and development [that Ghana] has achieved with a renewed focus on optimising domestic revenue mobilisation, rein in expenditure controls and rationalisation, improve SME productivity, efficiency and financing and address weaknesses in the energy sector”.
Initial negotiations
On 1 July 2022, President Nana Akufo-Addo authorised the Minister for Finance then, Ken Ofori-Atta, to open formal engagement with the International Monetary Fund (IMF) to secure a US$ 3 billion extended credit facility to support the country’s finances which took a bad hit as a result of the effects of the COVID-19 pandemic and the effects of the geopolitical war between Russia and Ukraine.
As part of the process, Ghana undertook a successful domestic debt restructuring and also kick-started negotiations with her external creditors to secure a debt restructuring agreement with them to support the country’s IMF programme.
Thus far, Ghana has secured the 3-billion-dollar IMF programme and has already received US$1.2 million in two 600-million-dollar tranches.
On Saturday, 13 April 2024, the country reached a staff-level agreement with the IMF for a third tranche of US$360 million to be released pending the approval of the executive board of the IMF.
