Key takeaways:
- The IMF’s executive board completed the sixth and final review of Ghana’s $3 billion support program
- The review clears a final disbursement of about $371 million
- Ghana sought the program in 2022 after debt-servicing costs soared amid the pandemic and global rate hikes
The International Monetary Fund’s executive board completed the sixth and final review of Ghana’s $3 billion support program on Monday, clearing the way for a final disbursement of about $371 million, the IMF said in a statement.
The IMF Deputy Managing Director, Bo Li, said Ghana’s performance under the program had been broadly satisfactory. “Sustained reform efforts and favorable commodity price developments” had helped stabilize the economy and lower debt risks, Li said.
Ghana, a major producer of oil, gold and cocoa, sought IMF support in 2022 after its debt-servicing costs soared following years of overspending, the COVID-19 pandemic, Russia’s invasion of Ukraine and high global interest rates, all of which battered the cedi and drove up inflation.
Ghana reached agreement with IMF staff on the final review in May, a step that required board approval before funds could be released.
Li said Ghana’s comprehensive debt restructuring was largely complete, and the country’s risk of debt distress had returned to moderate. He said continued reforms and strict fiscal discipline would remain essential to address the vulnerabilities that persist even after the restructuring.
The $3 billion credit facility helped Ghana emerge from what the IMF has described as its worst economic crisis in a generation, following a sovereign default in 2022 and a broad restructuring of the country’s domestic and external debt.
Li said Ghana’s central bank had successfully anchored disinflation and rebuilt the country’s external buffers, but flagged unfinished work ahead.
He said Ghana needs to safeguard central bank independence, transfer its domestic gold purchase program to the Gold Board, and implement a recapitalization plan for the central bank.
Li also said Ghana must press ahead with “decisive corrective measures, robust supervision, and finalization of the crisis management and resolution framework” for its financial sector, along with enacting conduct laws for public officials to strengthen governance.
