The International Monetary Fund’s executive board approved the second review of Ghana’s $3 billion loan programme on Friday, allowing for the immediate disbursement of around $360 million, the Fund said. The decision comes after the oil, gold and cocoa producer finalised a deal with its official creditor committee, a step that had been a pre-requisite to unlock the second tranche. The new tranche will take total IMF disbursements under the three-year bailout programme designed to help Ghana out of its worst economic crisis in a generation to $1.56 billion. In a statement, the IMF said Ghana’s performance under the programme has been generally strong.
“The authorities’ strategy aimed at restoring macroeconomic stability and reducing debt vulnerabilities is paying off, with clear signs of stabilisation emerging,” IMF Deputy Managing Director Kenji Okamu said. Ghana expects to receive the latest funds in around two days, a source at Ghana’s central bank said. Ghana turned to the IMF for financial support in 2022 as its cedi currency tumbled and inflation soared amid spiralling debt-service costs following years of overspending, the COVID-19 pandemic, Russia’s invasion of Ukraine and high global interest rates.
The economy has since stabilised. Last year’s economic growth surprised at 2.9% and 2024 first quarter growth was 4.7%. Inflation slowed from a peak of more than 54% in December 2022 to 23.1% last month, but the cedi currency has continued to depreciate. “Going forward, perseverance in macroeconomic policy adjustment and reforms is essential to fully restore macroeconomic stability and debt sustainability,” said Okamu. Ghana has been restructuring its $30 billion debt under the G20’s Common Framework mechanism. It reached an agreement in principle with two bondholder groups to restructure around $13 billion of its debt this month, bringing it closer to the end of the debt overhaul. The agreement will see its bondholders forego about $4.7 billion of their loans and provide cash flow relief of about $4.4 billion up until 2026 when the fund-assisted programme ends. Holders of Ghana’s instruments will also see a principle “haircut” of as much as 37%, details of the deal showed.
