Governor of the Bank of Ghana, Dr. Ernest Addison, has expressed optimism regarding Ghana’s foreign currency reserves strengthening with the anticipated disbursement of a third tranche of US$360 million from the International Monetary Fund (IMF).
The approval for Ghana’s third tranche of US$360 million is expected during the Executive Board meeting of the IMF in June, following the staff-level agreement reached on the second review of the loan-support program.
Speaking at a press briefing in Accra after concluding the staff-level agreement on Ghana’s second review of the three-year Extended Credit Facility (ECF) arrangement, Dr. Addison voiced confidence in the Board’s approval in June.
Dr. Addison emphasized that this funding would contribute to bolstering the country’s foreign reserves, which amounted to US$6.2 billion as of April 5, 2024, and would support the objectives of the US$3 billion loan-support program.
Foreign currency reserves, comprising cash and other assets like gold, held by central banks are crucial for maintaining stability in domestic currency and liquidity during economic crises, according to the World Economic Forum.
He highlighted the productive two-week engagement between Ghanaian authorities and the IMF Staff Mission, culminating in the staff-level agreement.
Furthermore, Dr. Addison expressed the government’s hopeful anticipation that this achievement would lead to “Management and Executive Board approval with the release of another tranche of IMF’s support.”
Dr. Addison acknowledged that despite delays in the disbursement of some donor support, the country’s foreign exchange reserves remained steady at US$6.2 billion as of April 5, 2024.
He affirmed the commitment to implementing policies that have sustained progress, including the innovative Gold for reserves program, which has significantly influenced foreign exchange management strategies.
Regarding the progress made since the implementation of the loan-support program, Dr. Addison highlighted substantial macroeconomic dividends, including a significant drop in inflation from 54% at the end of 2022 to 23% in 2023.
With the forthcoming US$360 million disbursement, Ghana’s total disbursement will amount to US$1.560 billion, having already received US$1.2 billion in the first two tranches since the program’s inception.
The three-year ECF arrangement is supported by the country’s Post-COVID-19 Programme for Economic Growth (PC-PEG), aimed at restoring macroeconomic stability and debt sustainability, building resilience, and fostering stronger and more inclusive growth.
Dr. Addison emphasized Ghana’s steadfast commitment to a set of policies since the program’s implementation, showcasing progress even under challenging circumstances.
Stéphane Roudet, Chief of Mission for Ghana, acknowledged Ghana’s significant improvement in the external sector, with international reserve accumulation surpassing program objectives. However, he emphasized the importance of reaching an agreement with official bilateral creditors on an MoU consistent with the terms agreed in January 2024, as the next crucial step for Ghana.