In a major development, the International Monetary Fund (IMF) has given its approval for the first review of Ghana’s loan programme, allowing for the immediate disbursement of approximately $600 million.
This comes as Ghana successfully reached a deal to restructure $5.4 billion of loans with its official creditors, a crucial step in unlocking the second tranche of IMF funding.
In a statement issued on Friday (19th January, 2024), the IMF announced that all quantitative performance criteria for the first review and nearly all indicative targets and structural benchmarks were met by the Ghanaian authorities. The Fund commended the country’s reform efforts, which have contributed to improvements in economic growth, decreased inflation, and increased international reserves. The IMF predicts that Ghana’s economy will grow by 2.3% in 2023 and 2.8% in 2024.
Following the announcement, IMF Mission chief for Ghana, Stéphane Roudet, held a joint briefing with Ghanaian authorities, stating that the tranche of funds would be made available to the central bank within hours. This positive development is expected to trigger an additional $550 million in funding from the World Bank, as confirmed by Ghana’s Finance Ministry last week. These funds will be allocated to various sectors, including $300 million in budget support and $250 million to support financial sector stability.
Ghana, with an external debt of around $30 billion as of the end of 2022, has set its sights on restructuring two-thirds of its debt. The successful restructuring of $5.4 billion with official creditors is a significant achievement in this regard. The approval of this loan disbursement by the IMF and the subsequent release of funds will provide Ghana with much-needed financial support as it continues its economic recovery and efforts to stabilize its economy.
This news comes as a welcome relief for the country, which has been grappling with economic challenges exacerbated by the COVID-19 pandemic.
The IMF’s financial assistance will undoubtedly help Ghana in its endeavors to restore economic stability and promote future growth prospects.
By Vincent Kubi