IMF approves third review of Ghana’s bailout program, disburses $360 million

The International Monetary Fund (IMF) has announced the completion of the third review of Ghana’s $3 billion, 36-month Extended Credit Facility (ECF) program, enabling an immediate disbursement of $360 million.

This brings Ghana’s total disbursements under the program to approximately $1.9 billion since its inception in May 2023.

In a statement on Monday, 2nd December 2024, the IMF acknowledged that Ghana’s reform efforts under the program are delivering positive results, with notable progress made in stabilising the economy after the severe financial challenges of 2022.

The Fund reported that economic growth is recovering swiftly, inflation is declining, and fiscal and external positions are improving.

However, it cautioned that challenges remain, particularly in the energy sector and with potential pressures linked to the upcoming elections.

The Fund commended Ghana’s fiscal performance, highlighting the country’s progress toward achieving a primary surplus of 0.5% of GDP in 2024, despite pressures from energy challenges and adverse weather. Looking ahead to 2025, the government plans to deepen fiscal consolidation, aiming for a primary surplus of 1.5% of GDP through enhanced domestic revenue mobilisation and prudent expenditure management.

Progress in Ghana’s debt restructuring was also noted. The statement revealed that the government has successfully restructured domestic debt, reached an agreement with the Official Creditors Committee under the G20 Common Framework, and completed a Eurobond exchange.

Ongoing engagements with external commercial creditors aim to align further restructuring with program objectives.

The IMF observed that the Bank of Ghana has maintained a tight monetary policy stance to curb inflation, rebuild foreign reserves, and strengthen financial sector stability.

It also commended the central bank’s measures to recapitalise private and state-owned banks, addressing vulnerabilities in the banking sector.

IMF Deputy Managing Director Bo Li remarked, “The authorities’ economic strategy is delivering on its objectives, with the economy showing clear signs of stabilization. Going forward, steadfast program implementation remains essential to fully and durably restore macroeconomic stability and debt sustainability while addressing longstanding structural vulnerabilities.”

The Fund praised Ghanaian authorities for their commitment to structural reforms aimed at fostering private sector investment, improving governance, and enhancing transparency.

These reforms are expected to underpin sustainable economic growth and job creation over the long term, according to the Fund.

Despite the progress, the IMF emphasised the importance of sustaining fiscal discipline, boosting revenue mobilisation, and resolving inefficiencies, particularly in the energy and cocoa sectors.

It also highlighted risks associated with elections and ongoing challenges in key economic sectors that could impact the pace of recovery.