The Government of Ghana is on track to receive yet another disbursement of about $370 million as part of an ongoing Extended Credit Facility (ECF)-supported programme as the IMF staff team concludes the fourth review of the programme in Accra. The disbursement is subject to approval by the IMF Executive Board. In a statement signaling the end of the fourth review period on Tuesday, the IMF staff team led by its Mission Chief for Ghana, Mr. Stéphane Roudet, noted a “significant improvement” in Ghana’s external position notwithstanding a higher-than-expected growth in 2024 but that progress was marred by fiscal slippages in the run-up to the December 7th general election which led to large accumulation of payables; inflation above programme target; and delay in several reforms.
According to the IMF team, the higher growth that Ghana saw last year was as a result of strong mining and construction activity, with a considerable improvement in the external sector driven by solid exports of gold and oil as well as higher remittances that have improved the West African nation’s international reserves far exceeding programme target.
“Notwithstanding these achievements, overall performance under the IMF-supported program deteriorated markedly at end-2024. Preliminary fiscal data point to slippages in the run-up to the 2024 general elections, on account of a large accumulation of payables. Inflation exceeded program targets. Several reforms and policy actions were delayed across the fiscal, financial, and energy sectors.”
“Against this backdrop, the new authorities have taken bold measures to address policy slippages and ensure the program objectives remain within reach. On the fiscal front, the government has launched an audit of the payables to firm up the size and nature of the slippages. Based on preliminary estimates of new payables, the primary balance posted a deficit of some 3¼ percent of GDP (compared to a targeted surplus of ½ percent of GDP). To address these slippages, the authorities have enacted a 2025 budget that targets a 1½ percent of GDP primary surplus and adopted several public financial management reforms. The latter includes an enhanced fiscal responsibility framework and new rules to tighten expenditure commitments.”, the IMF team stated
The IMF staff team which had been in Ghana since April 2 held meetings with senior officials of the new administration to discuss progress on the government’s policy and reform priorities with particular regard to the fourth review of the 3-year ECF-supported programme. The team met with Finance Minister, Governor of Bank of Ghana, and their teams as well as representatives from various government agencies, and other stakeholders. The Minister of Finance, Cassiel Ato Forson, assured the IMF team of the government’s commitment to cooperate with the Fund in order to achieve the programme’s objectives.
Ghana is at the IMF for a $3 billion facility for a period of 3 years. In May 17, 2023, the IMF Executive Board approved Ghana’s request for a total amount of SDR 2.242 billion to be disbursed. By the time the Executive Board takes a decision on the fourth review later this year, the total amount disbursed under the programme since May 2023 would have come up to $2,355 million (representing SDR 1,708 million). As part of a raft of guarantees that Government of Ghana made to the IMF under this arrangement, the country embarked on a restructuring of its debts first domestically and external. The external debt restructuring meant that Ghana would sign a Memorandum of Understanding (MoU) with the Official Creditors Committee under the G20 Common Framework. With the signing of the MoU completed, the focus is now on finalising the bilateral agreements needed to implement the MoU.
“The authorities are also pursuing good-faith efforts in reaching an agreement with other commercial creditors on a debt treatment that is in line with program parameters and the comparability of treatment principles.”, IMF said