KEY POINTS
- IMF approves a $360 million disbursement after Ghana meets all performance targets under its $3 billion programme.
- Ghana’s debt restructuring aims to cut $4.7 billion owed to bondholders, easing cash flow by $4.4 billion.
- Finance Minister highlights need for fiscal discipline ahead of the December 7 elections amid ongoing economic reforms.
International Monetary Fund (IMF) has approved the third review of Ghana’s $3 billion Extended Credit Facility (ECF) programme, paving the way for an immediate disbursement of approximately $360 million.
The announcement, made on Monday, underscores Ghana’s progress in implementing its economic recovery plan following its 2022 debt default.
According to CNBC Africa, the IMF noted that Ghana’s performance under the programme has been “generally satisfactory,” with all quantitative performance criteria and indicative targets for the review successfully met.
Government praises progress amid fiscal challenges
Ghana’s Finance Minister Mohammed Amin Adam, confirmed the IMF’s decision, emphasizing the government’s commitment to fiscal discipline.
“With three successful IMF reviews in a row, it shows the determination of the government to turn the economy to winning ways,” Adam said. “We have demonstrated uncharacteristic discipline in fiscal management and remain committed to doing everything for the benefit of our people.”
The approval comes ahead of Ghana’s presidential and parliamentary elections, slated for December 7, as the government seeks to reassure voters of its economic recovery efforts.
Debt restructuring provides critical relief
As part of the IMF-supported programme, Ghana has embarked on a comprehensive debt restructuring initiative. The restructuring aims to lower debt owed to bondholders by $4.7 billion and provide cash flow relief of $4.4 billion during the programme’s duration, which runs until 2026.
The West African nation, a leading exporter of gold and cocoa, has faced significant economic challenges since its debt default, including soaring inflation and currency depreciation. The IMF programme is designed to stabilize the economy, restore investor confidence, and ensure debt sustainability.
Broad economic reforms underway
The IMF’s ongoing support reflects Ghana’s commitment to implementing critical economic reforms. These include enhancing domestic revenue mobilization, streamlining public expenditure, and strengthening financial sector resilience.
While the programme marks significant progress, the IMF highlighted the need for continued efforts to address Ghana’s fiscal and external vulnerabilities.
Election year adds complexity
The review comes at a pivotal time for Ghana’s government as it prepares for elections. The success of the IMF programme is expected to bolster the administration’s economic credibility among voters, but economic recovery remains fragile amid global economic uncertainties.
The $3 billion IMF arrangement, approved in May 2023, has been instrumental in stabilizing Ghana’s economy, providing much-needed liquidity, and supporting structural reforms.
As the government progresses with its recovery plan, sustained policy discipline and successful implementation of reforms will be critical to achieving long-term economic stability.
With the latest disbursement, Ghana is better positioned to navigate its fiscal challenges and advance its recovery agenda in the coming years.
