The International Monetary Fund (IMF) has urged the Ghanaian government to continue implementing its reform agenda to fully restore macroeconomic stability and debt sustainability, especially in light of the upcoming 2024 elections. The IMF has recognized Ghana’s progress in restructuring its debt but emphasized that the country must stay on course with the reforms.
The IMF’s remarks were made after a staff team, led by Mission Chief Stéphane Roudet, visited Accra from September 24 to October 4, 2024. The visit was part of discussions around the third review of Ghana’s three-year program under the Extended Credit Facility (ECF), which was approved by the IMF Executive Board in May 2023, amounting to SDR 2.242 billion (US$3 billion).
Roudet noted, “The IMF staff and Ghanaian authorities have reached a staff-level agreement on the third review of Ghana’s economic program under the Extended Credit Facility arrangement. This staff-level agreement is subject to IMF Management approval and Executive Board consideration.”
Should the IMF’s Executive Board approve the agreement, Ghana will receive an additional SDR 269.1 million (US$360 million), bringing the total disbursement under the program to SDR 1,441 million (US$1.92 billion).
The IMF acknowledged that Ghana’s economic performance has been satisfactory so far, meeting key targets by the end of June 2024. Economic growth in the first half of 2024 was higher than anticipated, driven by sectors such as mining, construction, and information and communication. However, Roudet highlighted concerns over the ongoing drought in the northern regions, which could negatively affect agricultural output and put pressure on food prices.
Despite these challenges, the Bank of Ghana has pledged to maintain a tight monetary policy to curb inflation. “Inflation has continued to decline,” Roudet confirmed, while acknowledging that the dry spell could impact price stability in the second half of the year.
The Ghanaian government has made significant strides in restructuring its debt. Following a successful domestic debt restructuring in 2023, the country is now preparing to restructure its Eurobonds. Additionally, Ghana reached an agreement with its Official Creditors Committee under the G20 Common Framework in June 2024.
The IMF emphasized that the government must continue its efforts to secure agreements with external commercial creditors to ensure consistency with the program’s parameters. “The authorities are committed to pursuing good-faith efforts to reach an agreement with other commercial external creditors,” Roudet said.
The mission also focused on discussions around enhancing the sustainability of the energy sector, as well as measures to strengthen revenue collection and expenditure controls, particularly as the December 2024 elections approach. The IMF highlighted the importance of protecting the most vulnerable groups through social protection programs amid the country’s economic challenges.
“The government’s policy response should help mitigate these risks,” Roudet added, referring to the impact of the drought and the pressures on food prices.
Despite some emerging risks, the IMF remains optimistic about Ghana’s fiscal outlook. The country is expected to achieve a primary surplus of 0.5% of GDP by the end of the year, despite the spending pressures caused by the drought and the energy sector challenges.
The external sector has also seen improvements, with strong exports—particularly gold and oil—and higher remittances contributing to the accumulation of international reserves beyond program targets.
IMF staff met with key officials, including Finance Minister Dr. Mohammed Amin Adam and Bank of Ghana Governor Dr. Ernest Addison, as well as representatives from various government agencies. The team also engaged with other stakeholders to discuss the country’s progress and challenges in implementing the reform agenda.