Ghana Passes Another IMF Staff-Level Test | Economy

The International Monetary Fund (IMF) staff team, led by the Mission Chief for Ghana, Stéphane Roudet, has reached a staff-level agreement with Ghana on the third review of the country’s three-year economic programme with the fund.

The extended credit facility (ECF) arrangement, approved on May 17, 2023, provides Ghana with a total of $3 billion over a three-year period.

Upon approval by the IMF Executive Board, the latest review would allow Ghana to access $360 million, bringing the total disbursement under the programme to $1.920 million.

Speaking at a joint press conference in Accra, Mr Roudet said Ghana’s performance under the programme had been generally satisfactory, meeting all end-June 2024 quantitative targets.

He said economic growth in the first half of 2024 exceeded initial projections, driven by mining, construction, and the information and communication sectors.

He said inflation also continued to decline although a recent drought in northern areas of the country might impact agricultural output and food prices.

Energy sector reforms

Mr Roudet said discussions with authorities centred on reforms to enhance energy sector sustainability and transparency, as well as policies and reforms to strengthen revenue collections and expenditure controls in the run-up to the December elections.

He said the team also discussed efforts to strengthen key social protection programmes to protect the most vulnerable from the impact of difficult economic circumstances and ongoing policy adjustment.

The IMF Chief also added that Ghana had made remarkable progress on its public debt restructuring.

After successfully restructuring domestic debt last year and reaching agreement on a Memorandum of Understanding with Ghana’s Official Creditors Committee (OCC) under the G20 Common Framework in June, the government has just announced the successful completion of the consent solicitation to restructure its Eurobonds, with the exchange planned to take place in the coming weeks.

“The authorities are committed to pursuing good-faith efforts to reach an agreement with other commercial external creditors on a debt treatment consistent with programme parameters and the comparability of treatment principles,” Mr Roudet said.

Significant progress 

The Minister of Finance, Dr Mohammed Amin Adam, said the government had made significant progress in achieving programme objectives and targets set under the third review of the IMF-supported programme. 

The key objective of the programme is to restore macroeconomic stability and debt sustainability, build resilience through the implementation of ambitious and wide-ranging structural reforms, and lay the foundations for a stronger and more inclusive growth whilst protecting the poor and the vulnerable.

He said at the end of the third review mission, the IMF concluded that Ghana was on course to meeting all the six quantitative performance criteria and the four indicative targets under the programme. 

“This is the first time Ghana will be meeting all the indicative targets in a review,” he stated.

He said the government outperformed the inflation target set under the programme, and met almost all the structural benchmarks that were due by the end of September 2024.

Dr Amin Adam said the government expected the IMF Executive Board to meet on Ghana’s third review in the first week of December 2024, with an immediate release of the fourth tranche of $360 million upon successful conclusion of the review at the board level. 

He said the remarkable performance witnessed under the programme so far was supported by the strong and robust real GDP performance, the strides made in improving living conditions of the poor and vulnerable, and the strong disinflation process.

“Given the remarkable GDP performance in the first half of 2024 and other developments in the domestic economy, we are on course to outperform our real GDP growth target of 3.1 per cent for the year.

“We are also making remarkable progress on our social protection agenda to protect the poor and vulnerable under the IMF programme,” Dr Amin Adam added.

The minister said the government would continue to focus on optimising domestic revenue mobilisation while implementing stringent expenditure commitment control to avoid fiscal slippages in order to stay the course on the implementation of the IMF-supported programme.