The International Monetary Fund (IMF) has announced that Ghana has made remarkable progress in its debt restructuring efforts.
Mr. Stéphane Roudet, Mission Chief for Ghana, emphasised that “Ghana has made remarkable progress on its public debt restructuring.”
Following meetings in Accra from September 24 to October 4, 2024 IMF staff and the Ghanaian authorities reached a staff-level agreement on economic policies and reforms necessary to conclude the third review of the 36-Month Extended Credit Facility (ECF) program.
Once this review is approved by IMF Management and the IMF Executive Board, Ghana will gain access to approximately US$360 million in financing.
On debt restructuring, Mr Roudet explained that after successfully restructuring domestic debt last year and reaching an agreement with Ghana’s Official Creditors Committee (OCC) under the G20 Common Framework in June, the government has announced the successful completion of the consent solicitation to restructure its Eurobonds, with the exchange planned to take place in the coming weeks.
Mr. Stéphane Roudet noted that performance under the IMF-supported program has been generally satisfactory with all end-June 2024 quantitative targets met and continued progress on key structural reforms, despite some delays. The authorities’ policy and reform efforts have continued to deliver encouraging results.
He noted that economic growth in the first half of 2024 exceeded expectations, primarily fuelled by mining, construction and information and communication activities, with a broadening of the sources of growth across sectors during the second quarter.
Inflation has continued to decline, though a recent dry spell affecting the Northern regions is expected to adversely impact agricultural output, potentially constraining growth and adding pressure on food prices for the remainder of the year.
Mr. Roudet stated that the government’s policy response should help mitigate these risks, and the Bank of Ghana is committed to maintaining a tight monetary policy stance to support the continued decline in inflation.
Fiscal performance in 2024 has been strong, and Ghana is on track to achieve a primary surplus of 0.5 percent of GDP, despite emerging spending pressures from the recent drought in the northern regions and difficulties in the energy sector.
IMF Discussions with the Ghanaian authorities centered on reforms to enhance energy sector sustainability and transparency, as well as policies to strengthen revenue collections and expenditure controls leading up to the December elections.
The IMF team also discussed efforts to strengthen key social protection programs to shield the most vulnerable from the impacts of difficult economic circumstances and ongoing policy adjustments.
The authorities are committed to pursuing good-faith efforts to reach an agreement with other commercial external creditors consistent with program parameters and comparability of treatment principles.
The external sector has seen considerable improvement in 2024, driven by strong exports -particularly gold – and higher remittances, with international reserves accumulating beyond program targets. Financial stability has been maintained, with progress on bank recapitalisation and increased bank profitability.
The IMF staff team met with Finance Minister Dr. Mohammed Amin Adam, Bank of Ghana Governor Ernest Addison and their teams, along with representatives from various government agencies.
