Ghana has reached a Staff-Level Agreement (SLA) with the International Monetary Fund (IMF) after going through successfully the first review of its 36-month Extended Credit Facility (ECF) with the Fund for $3 billion balance of payment support.
Thus the country is expected to receive $600 million from the Fund before the end of November, this year, to bring the total funding under the ECF so far to $1.2 billion, if the review is approved by the IMF management and formally completed by the Fund Executive Board.
Ghana last year approached the IMF for a three-year $3-billion ECF support to implement its homegrown programme Post-COVID Programme for Economic Growth (PC-PEG) to restore macroeconomic stability and reduce growing public debt partly influenced by the coronavirus pandemic.
Addressing a joint press conference by the IMF, the Ministry of Finance and the Bank of Ghana (BoG) in Accra on Friday, the IMF Mission Chief for Ghana, Stephanie Roudet, said the review formed part of the review which would be done every six months as part of the IMF three-year ECF deal with Ghana.
He said for the Executive Board to approve the SLA to enable Ghana to receive the second tranche of funding, the country would have to complete its negotiation with external creditors as part of Ghana’s debt exchange programme.
Mr Roudet said he was impressed about the progress made since the IMF Board approved the ECF with Ghana.
Mr Roudet indicated that Ghana had met its non-oil revenue mobilisation target, adding that ambitious structural fiscal reforms were bolstering domestic revenues, improving spending efficiency, strengthening public financial and debt management, and enhancing transparency.
The Minister of Finance, Ken Ofori-Atta, said the progress the country sought to achieve as part of the IMF supported PC-PEG programme was on course, indicating that the stability that the Ghanaian economy was very much in need of had been achieved.
“We said we have ‘Turned the Corner’ and the major economic indicators such as inflation and exchange rate continues to drop and stabilise, and there is confidence returning in the economy,” he stated.
The Minister of Finance said GDP growth for the second quarter of 2023 was more than twice the 1.5 per GDP the IMF projected for Ghana in 2023.
Mr Ofori-Atta said Ghana had met the key deliverables and targets under the ECF including zero central bank financing and zero collateralised borrowing, financial sector strengthening, and arrears clearance.
“Reaching the SLA in these times of continued global uncertainty is a remarkable achievement particularly when other countries have faced challenges in reaching SLA in these periods,” Mr Ofori-Atta stated.
He said the government would complete negotiation with external creditors before the end of the year.
The Governor of BoG, Dr Ernest Addison for his part, said measures put in place by the government and the BoG had started yielding results, signaling a faster than expected turnaround which needed to be sustained to reset the economy.
He said from the beginning of the year to date, the BoG had built reserves of about US$650 million instead of a programmed drawdown of US$98 million, saying that had been boosted by the Gold for Reserves programme.
“And, as a result, we have seen relative stability in the exchange rate, depreciating by only 2.5 percent between February till date, ”Dr Addison stated.
BY KINGSLEY ASARE
