The International Monetary Fund (IMF) has expressed confidence that Ghana will soon reach an agreement with its bilateral creditors.
This agreement is seen as crucial for the IMF’s executive board to greenlight the release of additional funding to the country’s economy later this year.
Following Ghana’s recent staff-level agreement with the IMF, the country must now fulfil all conditions for the executive board to proceed with its second review. This includes meeting requirements for the disbursement of US$360 million by the end of June.
Among these conditions is the signing of a Memorandum of Understanding (MoU) with bilateral creditors to solidify financing assurances established last year.
Stephane Roudet, the IMF’s Mission Chief to Ghana, expressed optimism that reaching MoUs with official creditors is imminent, given the alignment evident among all parties involved.
“We are hopeful, confident that this MoU with bilateral creditors will happen in time for us to be able to have a board meeting and complete the second review of the programme before the end of June,” the Mission Chief told journalists in Washington, D.C in the United States of America.
The country needs approval of the next review and the subsequent disbursement to bolster confidence, unlock further funding and entrench the economic progress and relative stability achieved so far.
Spring meetings
During the IMF/World Bank Spring Meetings, the IMF Mission Chief addressed Ghanaian journalists, shedding light on the country’s fund-assisted program. He lauded Ghana’s restructuring efforts, deeming them historic and exemplary. Compared to other nations, Ghana’s restructuring process has been notably swift and smooth, bringing its debt levels into sustainable territory.
Mr. Roudet credited the government’s prudent measures under the US$3 billion extended credit facility (ECF) program for facilitating a quicker economic recovery. Notably, key macroeconomic indicators such as growth, inflation, and gross reserves have surpassed initial projections, indicating a stronger economy.
Furthermore, Mr. Roudet hinted at an upward revision of Ghana’s gross domestic product (GDP) growth forecast in the upcoming IMF review, reflecting the positive trajectory observed during the last mission in March.
Eurobondholders’ deal
Earlier, the Director of the IMF Africa Department, Mr. Abebe Selassie, also praised Ghana for its speedy restructuring exercise, noting that nothing fundamental was blocking a deal with Eurobondholders – which is the last leg of the debt rework exercise meant to achieve debt sustainability.
Mr. Selassie, however, stressed that a deal with Eurobondholders was not a prerequisite to approving the second review, stressing that all the fund wanted to see was constructive and ongoing discussions with the commercial holders of Ghana’s debts issued in foreign currencies.
“I should add here that the fact that they have not reached an agreement with its Eurobondholders will not prevent us from being able to provide more financing, although reaching that agreement is [of course] important,” the IMF Africa Director said in response to questions at the 2024 Spring Meetings.
Eurobond creditors must act
Mr. Selassie highlighted Ghana’s remarkable achievement in completing its restructuring exercise in a shorter timeframe compared to other countries like Zambia. He praised Ghana’s citizens, government, and creditors for their collective efforts in making the restructuring process successful.
He emphasised the historic nature of Ghana’s ability to carry out both domestic and external restructuring within a relatively brief period. While acknowledging Ghana’s efforts towards debt sustainability, Mr. Selassie emphasised the importance of commercial creditors playing their part in securing a deal to sustain economic recovery.
“Ghana has done its fair share and it is for creditors to take steps on this,” he said at the press conference streamed live across the globe.
“We are not going to ask the government to make more adjustments because creditors have not asked either. So, we will provide all the information necessary so creditors can move, allowing us to go to the board as soon as possible,” Mr. Selassie said.
2025 Budget
Mr. Selassie further stated that the recent IMF mission in Ghana successfully reached an agreement with the government on addressing the latest challenges. These policies are set to be unveiled in the 2025 Budget, which Mr. Selassie emphasized as significant.
Additionally, he highlighted Ghana’s upcoming elections in December, where a successor to President Nana Akufo-Addo will be elected.
This electoral process underscores Ghana’s exemplary democratic practices within the turbulent West African sub-region and across the continent since 1992.