An International Monetary Fund (IMF) staff team, led by its Mission Chief for Ghana, Stéphane Roudet, has reached a staff-level agreement on the first review of Ghana’s economic programme under the Extended Credit Facility (ECF) arrangement.
The meetings in Accra started from September 25 to October 6, 2023, to discuss progress on reforms and government’s policy priorities in the context of the first review of Ghana’s three-year programme.
“I’m very pleased to announce that the IMF staff and Ghanaian authorities have reached a staff-level agreement on the first review of Ghana’s economic programme under the Extended Credit Facility arrangement”, Mr Roudet said in a press statement.
According to him, a staff-level agreement is subject to IMF management approval and Executive Board consideration once the necessary financing assurances have been received.
“An agreement with official creditors on a debt treatment in line with programme parameters would provide the needed financing assurances”, he added.
Ghana to have access to $600m inflows
Mr. Roudet pointed out that upon completion of the Executive Board review, Ghana would have access to SDR 451.4 million (about $600 million), bringing the total IMF financial support disbursed under the arrangement, since May 2023, to SDR 902.8 million (about $1.200 billion).
He stated that even though Ghana faces acute economic and financial crisis, the government has adjusted macroeconomic policies, successfully completed the domestic debt restructuring operation, and launched wide-ranging reforms.
These actions, Mr. Roudet, admitted there are already generating positive results, as growth in 2023 has proven more resilient than initially envisaged, with inflation declining while the fiscal and external positions have improved, and the exchange rate stabilizing.
“Consistent with the authorities’ commitments under the Fund-supported programme, fiscal performance has been strong, and Ghana is on track to lower the fiscal primary deficit on a commitment basis by about 4.0 percentage points of GDP in 2023. Spending has remained within programme limits,” he said.
Citing some initiatives taken by government to support the vulnerable in times of the economic crises, Mr. Roudet said government has significantly expanded social protection programmes.
On the revenue side, he stated that Ghana has met its non-oil revenue mobilisation target.
He added that the ambitious structural fiscal reforms are bolstering domestic revenues, improving spending efficiency, strengthening public financial and debt management, as well as enhancing transparency.
“In light of Ghana’s compelling performance under the Fund-supported program, the critical next step is to secure an agreement with official creditors on the terms of a debt treatment consistent with the IMF Executive Board-approved program parameters and debt targets. We urge official creditors to move forward and agree on an appropriate debt treatment in line with the financing assurances they provided in May 2023.”