The Board of the International Monetary Fund (IMF) has completed the third review of Ghana’s 36-month Extended Credit Facility Arrangement, allowing for the immediate disbursement of SDR 269.1 million (about US$360 million).
The IMF made this known in a statement issued on Monday, December 2, 2024. It noted that Ghana’s performance under the programme has been generally satisfactory, and reform efforts are paying off with good progress made on debt restructuring.
“Growth is recovering rapidly, inflation has declined—although at a slower pace, and the fiscal and external positions have continued to improve. Steadfast implementation of the policy and reform agenda, including before and after the upcoming general elections, remains essential to fully restore macroeconomic stability and debt sustainability. Ghana’s policy and reform efforts under the IMF-supported programme have continued to deliver encouraging results.
“Following acute economic and financial pressures in 2022, the Fund-supported programme has provided a credible anchor for the government to adjust macroeconomic policies and launch comprehensive reforms to restore macroeconomic stability and debt sustainability while laying the foundations for higher and more inclusive growth.
“These efforts are paying off, with growth recovering rapidly, inflation declining, although at a slower pace, and the fiscal and external positions further improving. The medium-term outlook remains favourable but subject to downside risks, including those stemming from the elections and the challenges in the energy sector.
“Ghana’s performance under the IMF-supported programme has been generally satisfactory. All quantitative performance criteria and indicative targets for the third review were met. Notwithstanding some delays, good progress has also been made on the key structural reforms. The Ghanaian authorities have continued to make remarkable headways on their public debt restructuring.
“After successfully restructuring domestic debt last year and reaching an agreement on a Memorandum of Understanding with Ghana’s Official Creditors Committee (OCC) under the G20 Common Framework in June 2024, the government has completed the exchange of its Eurobonds at conditions consistent with programme parameters.”
The IMF further noted that Ghanaian authorities have also intensified engagement with their remaining external commercial creditors on restructuring in line with programme parameters and comparability of treatment.
It said Ghana’s fiscal performance is on track to achieve a primary surplus of ½ percent of GDP on a commitment basis, despite emerging spending pressures stemming from a recent dry spell and challenges in the energy sector.
“Looking ahead, the authorities are committed to further advancing fiscal consolidation by attaining a primary fiscal surplus of 1½ percent of GDP in 2025 through additional domestic revenue mobilisation and non-priority expenditure rationalisation, while expanding social programmes to cushion the vulnerable from the impact of policy adjustment. Continued fiscal consolidation and discipline are predicated on timely and continued efforts to modernise Ghana’s fiscal responsibility framework, strengthen revenue administration, bolster public financial management, and improve SOEs management, including to tackle challenges in the energy and cocoa sectors.”
“The Bank of Ghana (BoG) has maintained a prudent monetary policy stance to sustain a continued reduction in inflation against heightened risks and has taken important steps to rebuild international reserves. The BoG has also appropriately strengthened measures to buttress financial sector stability by intensifying actions to promote timely recapitalisation and steps to sustain the viability of banks. The government has started recapitalising state-owned banks consistent with available resources,” it stated.
The fund noted that ambitious structural reforms to help create an environment more conducive to private sector investment and to enhance governance and transparency remained key to boosting the economy’s potential and underpinning sustainable job creation.
“Going forward, staying the course of macroeconomic policy adjustment and reforms is essential to fully and durably restore macroeconomic stability and debt sustainability while fostering a sustainable increase in economic growth and poverty reduction,” it added.
