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Ghana likely to receive first $600m tranche of IMF bail out by Wednesday

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Ghana anticipates the International Monetary Fund (IMF) to approve a $600 million loan tranche by Wednesday, enabling disbursement within a week, according to Minister of State in the Finance Ministry Mohammed Amin Adam.

The West African country is seeking $3 billion from the IMF to strengthen its struggling economy.

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IMF Managing Director Kristalina Georgieva stated on Friday that Ghana’s official creditors have provided the required financial assurances for the IMF Executive Board to consider approving the loan.

“We expect a deal on Wednesday. With the disbursement, there is going to be $600 million as a first tranche just immediately after the approval,” Adam said by phone, adding that Ghana hoped to receive the funds within a week of the board’s decision.

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The Minister of State in Ghana’s Finance Ministry stated that a second loan tranche of $600 million is expected to be approved following a successful first program review, likely in November or December.

The remaining funds will be disbursed in equal tranches of $360 million after semi-annual reviews.

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These funds will bolster Ghana’s reserves and support the goal of achieving foreign reserves equivalent to three months of imports by 2026.

Ghana, along with other smaller and riskier emerging markets such as Sri Lanka and Zambia, is confronting a debt restructuring process due to the economic challenges posed by COVID-19 and Russia’s invasion of Ukraine.

Some $5.4 billion of debt to official creditors has been earmarked for restructuring, according to government data, as well as $14.6 billion of debt to private overseas creditors.

Adam said he expected negotiations with both sets of creditors to go well once the IMF signs off on the loan.

“Confidence is going to be restored and we expect that stakeholders will cooperate and will be encouraged to negotiate favourable terms with us,” he said, adding that the date for talks had not yet been set for either group.

Ghana has also turned to the World Bank as it fights to restore macroeconomic stability and end its worst economic crisis in a generation that has fuelled protests over the soaring cost of living.

Adam said the government was far along in talks with the World Bank to provide additional support of $900 million to be disbursed in three equal instalments of $300 million over three years.

“We are far advanced, almost concluding negotiations,” he said.

The World Bank has also agreed to support a financial sector stability fund with $250 million to help Ghana address the insolvency and liquidity challenges following a domestic debt exchange programme, which has affected some domestic banks.

Adam said the government was also in talks with the African Development Bank for over $100 million for the stability fund.


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