The International Monetary Fund (IMF) has announced that Ghana is likely to receive the third tranche of $360 million by the end of this month as the country struggles to manage its faltering cedi, which continues to weaken against a strengthening US dollar.
Julie Kozack, the IMF’s Director of Communication, indicated during a June 6 press briefing that the aim is to secure Board approval for the disbursement before the end of June, potentially bringing total disbursements to about $1.6 billion since May 2023.
“Our aim is to bring the review to the IMF’s Executive Board for approval before the end of June. This would give Ghana access to $360 million in financing, bringing the total to about $1.6 billion in disbursements since May of 2023,” she indicated.
The IMF has praised Ghana’s strong policy and reform efforts under its three-year programme, noting that signs of economic stabilisation are beginning to emerge. Growth in 2023 exceeded initial projections, indicating positive momentum.
The Fund highlighted significant progress in Ghana’s comprehensive debt restructuring efforts, with the domestic debt exchange completed last year and an agreement in principle reached with official bilateral creditors in January 2024. Engagement with external private creditors is ongoing, seeking their support in the restructuring process.
Ghana’s economy faces substantial pressure from a depreciating cedi, exacerbated by ongoing monetary policy tightening in the US and rising import bills. Since the beginning of the year, the cedi has lost more than 20% of its value against the US dollar.
The IMF emphasises that steadfast policy and reform implementation are crucial for restoring macroeconomic stability and debt sustainability. The government remains committed to continuing its programme as planned to ensure sustainable growth and support poverty reduction.
According to fresh data from the Bank of Ghana, the country’s total public debt has surged to GHS 658.6 billion, nearly twice the level it was at in December 2022 before the Domestic Debt Exchange Programme (DDEP) was executed.
The IMF will publish a full update of the economic situation and macroeconomic projections, including the latest Debt Sustainability Analysis (DSA), with the Staff Report after the Board considers the second review of the programme. The Fund reiterated the importance of continued progress with creditors to restore debt sustainability.
Looking ahead, Ghana remains dollar-hungry, having reached an IMF Staff-Level Agreement almost two months ago but still needing to meet the necessary requirements to unlock the third tranche of its IMF loan.
The IMF underscores that sustained policy and reform implementation will be vital to fully and durably restore macroeconomic stability and debt sustainability.
As Ghana navigates these challenges, its ability to adhere to the programme and manage its fiscal pressures will be closely monitored by international observers and market participants, who will be looking for signs of enduring economic recovery and stability.