Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, stated that the agreement between Ghana and its Official Creditor Committee (OCC) will facilitate the approval of the country’s third tranche of $360 million.
In a social media post on Wednesday, she congratulated the country on reaching an agreement with the OCC, saying, “this will support the IMF Executive Board’s consideration of the programme’s second review later this month.”
This development follows the Ministry of Finance’s announcement regarding the restructuring of approximately US$13 billion in external debt, marking a critical step towards restoring Ghana’s long-term debt sustainability.
Dr. Mohammed Amin Adam, the Minister of Finance, explained that the agreement would strengthen the ongoing discussions with private creditors, aiming to reach a comparable agreement as soon as possible.
“This landmark agreement marks an extraordinary milestone in Ghana’s debt restructuring journey and will further strengthen our ambitious reform agenda with the strong support of our development partners,” he said.
In an interview with the Ghana News Agency, Professor Godfred Alufar Bokpin, an Economist, described the agreement reached as a “major breakthrough” in the country’s debt restructuring process.
“From all indications, the MoU would be finalised by the end of this month, and the IMF Executive Board would approve the second review, which would occasion the release of the third tranche of US$360 million,” he said.
“There’s reasonable certainty that by the end of the month, we should be getting the third tranche, and it’s good news, but that’s not what will solve all the problems,” he added.
He called for intensified reforms to address key structural benchmarks, such as inflation and exchange rate pressures, in order to consolidate and sustain the gains made.
Reflecting on previous IMF loan support programs, Prof. Bokpin cautioned against easing efforts ahead of the third review of the current program. He urged the media, academia, and Civil Society Organisations (CSOs) to take a leading role in this endeavour.
“The third review, which will happen towards the latter part of this year and happen within the hot season of the election, is where the risk is; and that’s where we need to focus our attention on.”
He said it was because the country’s history has indicated that in almost all presidential cycles, under an IMF programme, the government tended not to take the review that happened at the peak of the election seriously.
He urged the government to work towards structural benchmarks for the third review, including fiscal responsibilities, and make policies in that regard tighter as a restraint on “excessive expenditure.”