The International Monetary Fund (IMF) Executive Board has approved a significant disbursement of $360 million to Ghana under its Extended Credit Facility (ECF), which totals $3 billion. This approval follows the successful completion of Ghana’s third review under the program, as communicated on December 2, 2024. With this latest disbursement, Ghana has now received $1.92 billion from the ECF. The funds are expected to be credited to the Bank of Ghana by the end of the week, providing critical financial support to the country in its recovery efforts.
The IMF’s assessment of Ghana’s performance under the ECF program has been largely positive, noting that various reform efforts are beginning to deliver results. The organization highlighted that Ghana has made considerable strides in its debt restructuring process, which is vital for stabilizing its economy. Indicators of economic recovery, such as growth and improvements in fiscal and external positions, have been reported, although inflation remains a concern, decreasing at a slower pace than anticipated.
One of the standout achievements noted by the IMF is Ghana’s progress in public debt restructuring. The Ghanaian government successfully restructured its domestic debt last year and established a Memorandum of Understanding with the Official Creditors Committee under the G20 Common Framework in June 2024. This has allowed Ghana to exchange its Eurobonds under terms aligned with ECF program objectives, significantly contributing to their financial stability and sustainable debt management.
Furthermore, the IMF indicated that Ghanaian authorities have intensified discussions with remaining external commercial creditors to ensure a synchronized approach to debt restructuring. This ongoing dialogue is crucial for maintaining comparability of treatment among different creditor groups and ensuring that the restructuring efforts are effective. Such measures are aimed at supporting Ghana’s broader fiscal strategy while minimizing risks associated with the country’s debt burden.
The monetary policy implemented by the Bank of Ghana (BoG) has been noted as prudent, as the BoG continues to focus on reducing inflation in the face of rising economic threats. They have also taken significant steps to rebuild international reserves, which is a key component of maintaining financial stability. As part of their initiatives, the BoG has further strengthened measures to support the financial sector, including promoting timely recapitalization of financial institutions and maintaining the viability of banks.
In parallel, the government’s efforts to recapitalize state-owned banks have begun, albeit within the confines of available resources. The commitment to enhancing the stability of the banking sector is integral to fostering a resilient economic environment. Overall, the coordinated efforts by the Ghanaian authorities, supported by the IMF, underline a shift towards a more sustainable economic framework, emphasizing the importance of effective debt management. The outlook appears positive as these measures are expected to strengthen Ghana’s economic recovery and enhance its financial resilience in the longer term.
