Fresh reports indicate that government could secure as much as $3 billion from the International Monetary Fund in Balance of Payment [BoP] support to stabilise the economy.
The $3bn BoP support, reports further indicate, will be made available in tranches spread over three years.
A billion dollars is expected to come in immediately if the Fund approves government’s Enhanced Domestic Economic Programme.
The amount is double what the country was considering a month ago as it tries to shore up its finances and gain access to the global markets.
“Since negotiations for the programme are starting now, it’s too early to comment on the final form the programme will take,” an IMF spokeswoman said in an emailed response to Bloomberg.
“The Extended Credit Facility for low-income countries is the Fund’s main tool for medium-term support for countries facing protracted balance of payments problems, similar to Ghana’s. The duration of such an arrangement is between three to four years, and extendable to five years”, she pointed out
She added that the final programme is ultimately decided by the IMF’s Executive Board,
The government began discussions with the Bretton Wood institution in July 2022, reversing President Akufo-Addo’s administration pledge not to seek a financial programme from the IMF.
Ghana has been struggling to stabilise a rising debt which hit 78.3% of Gross Domestic Product at the end of June 2022, from 62.5% five years ago.
The struggling economy has impacted negatively on the cedi which has almost hit GHS 9 to a dollar. This has also pushed inflation up significantly.
Ratings agency, S&P on Friday, August 5th, 2022, revised Ghana’s rating from B-/B to CCC+/C, putting the country’s creditworthiness into junk status.
It also reviewed the country’s economic outlook to negative, reflecting “Ghana’s limited commercial financing options, and constrained external and fiscal buffers.”
According to Marketwatch, the American-based credit rating agency, the Covid-19 pandemic and the Russian invasion of Ukraine have complicated Ghana’s fiscal and external imbalances.