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IMF and Ghana Agree on Extended Credit Facility, Another $360 Million.

Recent Agreement Boosts Ghana’s Economic Recovery Efforts.

The International Monetary Fund (IMF) and the Ghanaian government have recently reached a significant agreement regarding an extended credit facility, paving the way for additional loan support to bolster the country’s economic recovery efforts.

During April 2-12, 2024, a team from the IMF, led by Mr. Stéphane Roudet, Mission Chief for Ghana, held constructive meetings in Accra. These discussions revolved around evaluating progress on reforms and outlining the authorities’ policy priorities within the framework of Ghana’s three-year program under the Extended Credit Facility.

The IMF Executive Board had previously approved an arrangement in May 2023, providing Ghana with a total amount of SDR 2.242 billion or US$ 3 billion. This recent agreement, following the second review of Ghana’s economic program, signifies a positive step forward in unlocking further financial assistance for the country.

Mr. Roudet, after the conclusion of the recent mission, announced that a staff-level agreement had been reached between IMF staff and Ghanaian authorities regarding the second review of the Extended Credit Facility arrangement. However, this agreement is contingent upon IMF Management approval and Executive Board consideration, pending the receipt of necessary financing assurances.

Upon completion of the Executive Board review, Ghana stands to gain access to SDR 269.1 million or approximately US$ 360 million, bringing the total IMF financial support disbursed since May 2023 to SDR 1,171.9 million (about US$ 1,560 million).

The IMF acknowledged the strong performance under the IMF-supported program, with most quantitative targets being met and significant progress made on key structural reform milestones. This progress includes measures to restore macroeconomic stability, enhance debt sustainability, and foster stronger and more inclusive growth.

The positive results of Ghana’s policies and reforms are evident, with economic activity surpassing initial projections in 2023 and growth forecasts for 2024 set for an upward revision. Monetary policy remains appropriately tight, contributing to a rapid decline in inflation.

Fiscal discipline has also improved, with the fiscal primary balance registering a notable improvement in 2023 and on track to achieve a fiscal primary surplus in 2024. Additionally, social protection programs have been expanded to mitigate the crisis’s impact on vulnerable populations.

Ghana’s progress extends to non-oil revenue mobilization targets being met, alongside ambitious structural fiscal reforms aimed at strengthening public financial management and enhancing transparency. The external sector has witnessed significant improvements, exceeding program objectives in international reserve accumulation.

The IMF emphasizes the importance of Ghana reaching an agreement with its official bilateral creditors on an MoU consistent with program terms agreed upon in January 2024. Continued efforts are urged to secure agreements with all creditors aligned with program parameters.

Throughout this process, the IMF team engaged with key stakeholders, including Finance Minister Adam, Bank of Ghana Governor Addison, and various government agency representatives, underscoring a collaborative approach to advancing Ghana’s economic objectives.