An International Monetary Fund (IMF) staff team, led by Stéphane Roudet, mission chief for Ghana, on Friday (6 October) concluded Ghana’s first assessment and reached a staff-level agreement on the country’s Extended Credit Facility (ECF) arrangement.
The IMF team held meetings in Accra from 25 September to 6 October 2023 to to discuss progress on reforms and the government’s policy priorities in the context of the first review of Ghana’s three-year program under the Extended Credit Facility.
The team held meetings with Vice-President Bawumia, Finance Minister Ofori-Atta, and Bank of Ghana Governor Addison, and their teams, as well as representatives from various government agencies.
“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. This staff-level agreement is subject to IMF Management approval and executive board consideration once the necessary financing assurances have been received. An agreement with official creditors on a debt treatment in line with program parameters would provide the needed financing assurances. Upon completion of the Executive Board review, Ghana would have access to SDR 451.4 million (about US$600 million), bringing the total IMF financial support disbursed under the arrangement, since May 2023, to SDR 902.8 million (about US$1,200 million), Roudet said.
“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.”
He said, “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,” Roudet added.
“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 IMF head of mission said.
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, the country needs official creditors to quickly reach agreement on a debt treatment in line with the financing assurances they provided in May 2023.