Finance Minister Ken Ofori-Atta has stated that Ghana is on course to receive the second installment of the IMF bailout funds in December, aimed at bolstering the government’s balance of payments for the years 2023 and 2024.
Speaking at the 3rd GIPC-CEO breakfast meeting held in Accra, Mr. Ofori-Atta affirmed that the government is prepared for its initial review with the IMF scheduled for November, as they anticipate the arrival of the second tranche of $600 million.
“We are ready for the mission that comes at the end of September so that we can try and get the staff level agreement, while the mission is here, and then we go to the board in November for the release of the 2nd tranche which will be $600 million. In addition to that, there are certain things we need to do with the World Bank so that we can get our DPO, which will be another $300 million. I believe that we are on course to maybe get a billion dollars to support Bank of Ghana’s balance of payment issues.”
He also expressed optimism about finalizing discussions with the Paris Club and its bilateral creditors by the end of this year.
In May 2023, Ghana received the initial portion of its $3 billion bailout package from the International Monetary Fund (IMF). This three-year extended credit facility was intended to resuscitate the country’s struggling economy.
However, in August 2023, the International Monetary Fund (IMF) issued a caution to the Bank of Ghana, underscoring the importance of adhering to its policy mandates despite the financial challenges experienced in the fiscal year ending in 2022. The IMF stressed the necessity for the central bank to implement decisive measures to steer inflation back towards its targeted rate of 8 percent.
“The loss the BoG incurred in the process has contributed to reducing its net equity to a negative value. Importantly, however, this does not prevent the BoG from fulfilling its policy mandates and ensuring inflation gradually returns towards its 8-percent target”, the IMF said in a press release.
Nonetheless, the IMF has endorsed the Bank of Ghana’s GHS 60 billion loss, asserting that the impairment, a result of the government’s Domestic Debt Exchange (DDE), was imperative to “reestablish macroeconomic stability and public sustainability.”
According to the Bank of Ghana’s June 2023 Economic and Financial Stability Report, the country’s balance of payments at the end of June 2023 registered a deficit of $107.8 million, equivalent to about 0.1% of GDP. This deficit is notably lower than the one recorded during the same period in the previous year.