Ghana is set to receive a third tranche of US$360 million by Monday, July 1st, 2024, bringing the total disbursement to US$1.56 billion, following the International Monetary Fund’s (IMF) approval of the second review of the country’s Extended Credit Facility (ECF) Arrangement.

This milestone underscores Ghana’s progress in economic reform and provides a substantial impetus to the nation’s ongoing recovery efforts.

Dr. Mohammed Amin Adam, Ghana’s Finance Minister, confirmed the upcoming disbursement.

“This is yet an important positive development in our journey towards macroeconomic stability.”

The minister’s remarks followed the IMF Executive Board’s approval to finalize the second review of Ghana’s US$3 billion, 36-month Extended Credit Facility (ECF) Arrangement, originally endorsed in May 2023.

The IMF has provided a favorable assessment of Ghana’s progress under the program. According to the Fund,

“Ghana’s performance under the IMF-supported program has been generally strong. All quantitative performance criteria for the second review and almost all indicative targets were met.”

This strong performance has paved the way for the immediate disbursement of SDR 269.1 million, equivalent to about US$360 million.

The IMF highlighted that Ghana’s economic reform program is delivering on its objectives. Following acute economic and financial pressures in 2022, the Fund-supported program has provided a credible anchor for the government to adjust macroeconomic policies and implement reforms. These efforts aim to restore macroeconomic stability and debt sustainability while laying the foundations for higher and more inclusive growth.

Deputy Managing Director of the IMF, Kenji Okamura, praised Ghana’s progress, stating, “The authorities’ strategy aimed at restoring macroeconomic stability and reducing debt vulnerabilities is paying off, with clear signs of stabilization emerging.”

He noted that growth has proven more resilient than initially expected, inflation is declining at a faster pace, and both fiscal and external positions have shown significant improvement.

Significant strides have been achieved across several critical sectors. Ghana’s primary fiscal balance saw an improvement of more than 4 percent of GDP last year, with a continued commitment from authorities towards further fiscal consolidation. The Bank of Ghana has maintained a prudent monetary policy stance, leading to a swift decrease in inflation rates and initiatives aimed at bolstering international reserves.

Regarding debt restructuring, Ghana finalized an agreement with its Official Creditor Committee under the G20’s Common Framework on June 11, 2024. This agreement provided crucial financial assurances, facilitating the completion of the second ECF review. Moreover, authorities have recently reached a preliminary agreement with Eurobond holders on restructuring terms aligned with program guidelines.

Despite a positive outlook, the IMF advises caution due to potential risks, notably those associated with the upcoming general elections in December 2024.

“Going forward, perseverance in macroeconomic policy adjustment and reforms is essential to fully restore macroeconomic stability and debt sustainability, while fostering a sustainable increase in economic growth and poverty reduction.”

The IMF recommends that Ghana continue to focus on mobilizing domestic revenue, streamlining public spending, and finalizing its comprehensive debt restructuring. The Fund also stresses the importance of maintaining a tight monetary stance, enhancing exchange rate flexibility, and implementing banks’ recapitalization plans to ensure financial sector stability.