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IMF Gives Nod to Second Tranche of US$600m for Ghana

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Ghana’s economic recovery journey receives a significant boost as the International Monetary Fund (IMF) greenlights the second tranche of US$600 million for the Post COVID-19 Programme for Economic Growth (PC-PEG).

This development comes on the heels of successfully completing the initial review of the three-month Extended Credit Facility (ECF) arrangement, and a recent agreement with Official Creditors.

In a statement released on Friday evening, the IMF commends Ghana’s robust performance under the program, noting the fulfillment of all quantitative performance criteria for the first review and the near-attainment of all indicative targets and structural benchmarks. The immediate disbursement of Special Drawing Right (SDR) 451.4 million (equivalent to approximately US$600 million) brings Ghana’s total disbursements under the arrangement to around US$1.2 billion.

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Mr. Bo Li, Deputy Managing Director and Acting Chair of the IMF, emphasizes the ongoing commitment required to safeguard vulnerable populations and create room for increased social and development spending. He calls on the government to focus on improving tax administration, fortifying expenditure control, and managing arrears efficiently, in addition to refining fiscal rules and institutions. The effective management of State-Owned Enterprises (SOEs) is also highlighted as a crucial aspect for sustainable adjustments.

Ghana’s ambitious three-year US$3 billion PC-PEG initiative with the IMF aims to restore macroeconomic stability and debt sustainability, coupled with comprehensive reforms to fortify resilience and pave the way for robust and inclusive economic growth. The IMF acknowledges the decisive actions of Ghanaian authorities in controlling inflation, rebuilding foreign reserve buffers, and maintaining a prudent monetary stance with enhanced exchange rate flexibility, underscoring their significance in achieving program objectives.

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Furthermore, the statement highlights the commitment of the Bank of Ghana (BoG) in deploying regulatory and supervisory tools to mitigate the impact of domestic debt restructuring on financial institutions, showcasing a proactive approach to maintaining financial stability.

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