The International Monetary Fund (IMF) has concluded its third review of Ghana’s economic program under the Extended Credit Facility (ECF), which could facilitate a disbursement of $360 million, contingent upon IMF Management approval and Executive Board consideration.
This staff-level agreement was established by a team led by Mr. Stéphane Roudet, Mission Chief for Ghana, following discussions held in Accra from September 24 to October 4, 2024.
If the Executive Board review is favourable, Ghana would gain access to SDR 269.1 million (approximately US$360 million), bringing total disbursements under the ECF since May 2023 to SDR 1.441 billion (around US$1.92 billion).
Progress and Challenges
Touching on the progress of Ghana’s economic reforms, Mr. Roudet noted that the IMF-supported program has largely met expectations.
The team reported that all quantitative targets set for June 2024 were achieved, although some structural reforms faced delays.
Economic growth and inflation management emerged as focal points of government efforts during this period.
Furthermore, the team observed that economic growth in the first half of 2024 surpassed initial forecasts, significantly bolstered by the mining, construction, and information and communication sectors.
However, the recent dry conditions in the Northern regions have raised concerns about agricultural productivity, with potential implications for food prices in the latter part of the year.
In response to these challenges, the Bank of Ghana has committed to maintaining a tight monetary policy aimed at controlling inflation.
Fiscal Performance and Policy Focus
On the fiscal front, the team highlighted that Ghana is on track to achieve a primary surplus of 0.5% of GDP in 2024, despite emerging pressures from the energy sector and drought-related expenditures.
Discussions between the IMF and Ghanaian authorities have centered on strategies to enhance sustainability and transparency in the energy sector.
Additionally, measures to improve revenue collection and expenditure control were emphasized as the country approaches the December elections.
Moreover, the team underscored the importance of reinforcing social protection programs to assist vulnerable populations during ongoing economic difficulties.
Debt Restructuring and External Sector Growth
On debt restructuring, the IMF team acknowledged notable advancements in Ghana’s public debt management. The government completed domestic debt restructuring in 2023 and reached a Memorandum of Understanding with the Official Creditors Committee under the G20 Common Framework.
Recently, the government announced the successful conclusion of a consent solicitation to restructure its Eurobonds, with the exchange anticipated to occur soon.
In terms of external performance, the team observed that Ghana’s export sector thrived in 2024, driven by robust gold and oil exports, along with increased remittances. This positive trend has led to international reserves surpassing program targets, suggesting enhanced financial stability.
