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Tag: IMF

  • IMF expresses concerns over Ghana’s economic stability ahead of 2024 elections

    IMF expresses concerns over Ghana’s economic stability ahead of 2024 elections

    The International Monetary Fund (IMF) has raised concerns that the upcoming general elections in December 2024 could potentially threaten the progress achieved under its program with Ghana.

    According to the IMF, “the medium-term outlook remains favourable but subject to downside risks—including those related to the upcoming general elections”.

    It added that “keeping the domestic revenue mobilization agenda on track and tightening expenditure commitment controls is critical to avoid policy slippages ahead of the December 2024 general elections”.

    Following the approval of Ghana’s second program review and the disbursement of $360 million, the IMF emphasized in a statement the importance of the government adhering to the program’s objectives.

    It underscored the necessity of maintaining sustainable growth and reducing poverty through consistent implementation.

    Additionally, the IMF highlighted the critical need to uphold macroeconomic policy adjustments and reforms to achieve lasting stability and debt sustainability.

    “These efforts should be supported by continued progress in improving tax administration, strengthening expenditure control and management of arrears, enhancing fiscal rules and institutions”, the IMF advised.

    Ghana’s Performance under the IMF Programme

    The IMF however stated that despite the elections related concerns, “Ghana’s performance under the programme has been generally strong, both in terms of meeting the quantitative objectives (for example on budgetary performance), and also in implementing structural reforms”.

    The statement emphasized that the reforms aim to enhance economic resilience, achieve sustained improvements in public finances, and establish the groundwork for robust and inclusive growth.

    “The authorities have so far demonstrated a strong commitment to the programme objectives, and we welcome Finance Minister Adam’s signaling of the government’s continued commitment to the policies under the programme”.

    The Deputy Managing Director of the IMF, Gita Gopinath, commended the government and the Bank of Ghana for their decisive actions in controlling inflation and strengthening foreign reserve buffers.

    However, she emphasized the importance of maintaining a suitably tight monetary policy and improving exchange rate flexibility.

    Does the IMF see signs of success under the Programme?

    Despite a challenging global economic climate, the IMF noted that Ghana’s reforms are yielding positive results, with indications of economic stabilization becoming evident.

    The IMF also highlighted that growth has shown greater resilience than originally anticipated, and inflation is decreasing significantly from its peak in 2022.

    Furthermore, the IMF pointed out improvements in fiscal and external positions, underscored by the growth in the Bank of Ghana’s international reserves.

    Debt Restructuring and the IMF Programme

    The IMF applauded Ghana for providing the financing assurances necessary for the second review under the ECF Arrangement to be completed.

    “The authorities have also recently reached an agreement in principle with representatives of Eurobond holders on a restructuring consistent with program parameters, subject to confirmation on comparability of treatment by the OCC”.

    Background

    In May 2023, Ghana entered into an IMF program aimed at bolstering the country’s post-COVID economic recovery.

    The program focuses on three main objectives:

    Firstly, implementing substantial and front-loaded measures to restore fiscal sustainability. This involves increasing domestic revenue mobilization and enhancing the efficiency of public spending, with a strong emphasis on safeguarding vulnerable groups.

    Secondly, undertaking ambitious structural reforms to support fiscal adjustments and strengthen resilience against economic shocks. These reforms target tax policies, revenue administration, and public financial management, alongside addressing weaknesses in the energy and cocoa sectors.

    Thirdly, implementing measures to curb inflation, including raising interest rates by the Bank of Ghana and discontinuing monetary financing of the budget. A flexible exchange rate policy aims to rebuild international reserves.

    These efforts require continued improvements in tax administration, stricter control over expenditures and arrears management, enhancement of fiscal rules and institutions, and better management of state-owned enterprises. Strengthening targeted social protection programs is crucial to mitigate the impact of fiscal adjustments on vulnerable populations.

  • IMF upgrades Ghana’s 2024 growth rate projection to 3.1%

    IMF upgrades Ghana’s 2024 growth rate projection to 3.1%

    The International Monetary Fund (IMF) has upgraded Ghana’s growth projection for the 2024 fiscal year from 2.8% to 3.1%.

    Stephane Roudet, the IMF’s Mission Chief, announced the revision, attributing it to emerging signs of economic stabilization in Ghana.

    Speaking at a joint press conference with the IMF, Bank of Ghana (BoG), and Finance Ministry on July 1, Roudet noted that Ghana’s current growth rate has demonstrated greater resilience than previously anticipated.

    “Signs of economic stabilization are emerging; for example, economic growth has proven more resilient than initially envisaged, therefore we are revising our growth projection up from 2.8% to 3.1% for 2024,” Roudet said.

    “Inflation is declining rapidly from 54% in December 2022 to 23% in May 2024, and Ghana’s International Reserve has been increasing,” he added.

    The latest update on Ghana’s growth projection coincides with the IMF’s approval of the second review of the country’s US$3 billion Extended Credit Facility program on June 28, 2024.

    As a result of this approval, the third tranche of US$360 million is expected to be disbursed into the Bank of Ghana’s account by the close of Monday, July 1, 2024.

    This disbursement will bring Ghana’s total disbursements under the IMF ECF arrangement to approximately US$1.6 billion since its initial approval in May 2023.

    Prior to this development, Ghana successfully concluded negotiations on debt restructuring with Eurobond investors, involving approximately $13 billion of debt. Eurobond holders have agreed to a nominal haircut of 37%.

    Furthermore, creditors now have the choice between two payment options: one with an initial 5% interest rate and the other with a 1.5% interest rate.

    3.5

  • Ghana’s economic growth has proven more resilient than expected – IMF

    Ghana’s economic growth has proven more resilient than expected – IMF

    Ghana’s economic growth has shown remarkable resilience, exceeding initial expectations, according to the International Monetary Fund (IMF).

    The IMF’s Executive Board recently completed the second review of Ghana’s $3 billion, 36-month Extended Credit Facility (ECF) Arrangement, first approved in May 2023.

    This milestone allows for an immediate disbursement of SDR 269.1 million (approximately $360 million), bringing the total disbursements to about $1.6 billion under the arrangement.

    The IMF highlighted that Ghana’s economic reform program is delivering on its objectives. Despite acute economic and financial pressures in 2022, the Fund-supported program has provided a credible framework for the government to adjust macroeconomic policies and implement crucial reforms.

    These measures are aimed at restoring macroeconomic stability and debt sustainability while laying the foundation for higher and more inclusive growth. The positive outcomes of these efforts are clear: growth is more robust than initially projected, inflation is decreasing rapidly, and both fiscal and external positions are improving.

    The IMF commended Ghana’s strong performance under the program, noting that all quantitative performance criteria for the second review and almost all indicative targets were met. Significant progress has also been made on key structural reforms, despite some delays.

    In their comprehensive debt restructuring efforts, the Ghanaian authorities have made notable advancements. On June 11, 2024, an agreement was reached with Ghana’s Official Creditor Committee (OCC) under the G20’s Common Framework, formalizing a debt treatment agreement. This agreement provided the necessary financing assurances for the completion of the second ECF review. Additionally, an agreement in principle was reached with Eurobond holders on a restructuring plan, subject to confirmation of comparability of treatment by the OCC.

    Ghana’s primary fiscal balance improved by over 4 percent of GDP last year. Looking ahead, the authorities are committed to further fiscal consolidation, aiming for primary fiscal surpluses of ½ percent of GDP this year and 1½ percent of GDP in 2025.

    These efforts are supported by reforms to enhance revenue mobilization, streamline non-priority expenditures, and expand social protection programs to mitigate the impact of fiscal adjustments on vulnerable populations.

    Measures are also being taken to strengthen tax administration, expenditure controls, arrears management, fiscal rules and institutions, and the management of state-owned enterprises (SOEs), particularly in the energy and cocoa sectors.

    The Bank of Ghana (BoG) has maintained a prudent monetary policy stance to support rapid inflation reduction and has taken steps to rebuild international reserves.

    The BoG has also strengthened measures to ensure financial sector stability, including the implementation of banks’ recapitalization plans. The Ministry of Finance has initiated the recapitalization of state-owned banks in line with available resources.

    Ambitious structural reforms aimed at creating a more conducive environment for private sector investment and enhancing governance and transparency are gaining prominence. These reforms are crucial for boosting the economy’s potential and supporting sustainable job creation.

    Sustaining macroeconomic policy adjustments and reforms is essential for fully restoring macroeconomic stability and debt sustainability, especially during the upcoming electoral period. These efforts are vital for fostering sustainable economic growth and reducing poverty.

  • Ghana’s economy to grow by 3.1% in 2024 – IMF

    Ghana’s economy to grow by 3.1% in 2024 – IMF

    The International Monetary Fund’s (IMF) Mission Chief for Ghana, Stéphane Roudet, has noted that his outfit has revised its projection for Ghana’s economic growth this year.

    The Fund earlier projected that Ghana’s economy will grow 2.8 per cent this year and 4.4 per cent next year on the back of on-going reforms. 

    Stéphane Roudet has however noted that due to the sustained growth in the economy, the Fund projects a 3.1% growth for the country in 2024.

    He made this known when he announced that the IMF Executive Board has completed the second review of Ghana’s 36-month Extended Credit Facility Arrangement.

    This allows for the immediate disbursement of SDR 269.1 million (about US$360 million).

    Ghana’s performance under the program has been generally strong, according to the Fund.

    “All quantitative performance criteria for the second review and almost all indicative targets were met. Good progress is being made on the debt restructuring, and key structural reforms are advancing.”

    “The authorities’ reform efforts are paying off. Growth has proven more resilient than expected, inflation has declined rapidly from its 2022 highs, and the fiscal and external positions have improved significantly,” the IMF noted.

    On June 11, 2024, the authorities reached agreement with Ghana’s Official Creditor Committee (OCC) under the G20’s Common Framework on a Memorandum of Understanding (MoU) formalizing the agreement in principle on a debt treatment, which was reached in January 2024.

    This agreement on a debt treatment, consistent with program parameters, provided the financing assurances necessary for the second review under the ECF Arrangement to be completed.

    The authorities have also recently reached agreement in principle with representatives of Eurobond holders on a restructuring consistent with program parameters, subject to confirmation on comparability of treatment by the OCC. 

    Ghana’s primary fiscal balance improved by over 4 percent of GDP last year. Looking ahead, the authorities are committed to further advancing fiscal consolidation, including by achieving primary fiscal surpluses of ½ percent of GDP this year and 1½ percent of GDP in 2025.

    These efforts are underpinned by reforms to bolster revenue mobilization and streamline non-priority expenditures, while expanding social protection programs to mitigate the impact of fiscal adjustment on the most vulnerable.

    The authorities are also taking steps to strengthen tax administration, expenditure controls and management of arrears, fiscal rules and institutions, and SOEs management—including in the energy and cocoa sectors. 

  • Ghana anticipates arrival of 3rd tranche of IMF bailout amounting to US$360m today

    Ghana anticipates arrival of 3rd tranche of IMF bailout amounting to US$360m today

    Ghana is set to receive a third tranche of US$360 million by Monday, July 1st, 2024, bringing the total disbursement to US$1.56 billion, following the International Monetary Fund’s (IMF) approval of the second review of the country’s Extended Credit Facility (ECF) Arrangement.

    This milestone underscores Ghana’s progress in economic reform and provides a substantial impetus to the nation’s ongoing recovery efforts.

    Dr. Mohammed Amin Adam, Ghana’s Finance Minister, confirmed the upcoming disbursement.

    “This is yet an important positive development in our journey towards macroeconomic stability.”

    The minister’s remarks followed the IMF Executive Board’s approval to finalize the second review of Ghana’s US$3 billion, 36-month Extended Credit Facility (ECF) Arrangement, originally endorsed in May 2023.

    The IMF has provided a favorable assessment of Ghana’s progress under the program. According to the Fund,

    “Ghana’s performance under the IMF-supported program has been generally strong. All quantitative performance criteria for the second review and almost all indicative targets were met.”

    This strong performance has paved the way for the immediate disbursement of SDR 269.1 million, equivalent to about US$360 million.

    The IMF highlighted that Ghana’s economic reform program is delivering on its objectives. Following acute economic and financial pressures in 2022, the Fund-supported program has provided a credible anchor for the government to adjust macroeconomic policies and implement reforms. These efforts aim to restore macroeconomic stability and debt sustainability while laying the foundations for higher and more inclusive growth.

    Deputy Managing Director of the IMF, Kenji Okamura, praised Ghana’s progress, stating, “The authorities’ strategy aimed at restoring macroeconomic stability and reducing debt vulnerabilities is paying off, with clear signs of stabilization emerging.”

    He noted that growth has proven more resilient than initially expected, inflation is declining at a faster pace, and both fiscal and external positions have shown significant improvement.

    Significant strides have been achieved across several critical sectors. Ghana’s primary fiscal balance saw an improvement of more than 4 percent of GDP last year, with a continued commitment from authorities towards further fiscal consolidation. The Bank of Ghana has maintained a prudent monetary policy stance, leading to a swift decrease in inflation rates and initiatives aimed at bolstering international reserves.

    Regarding debt restructuring, Ghana finalized an agreement with its Official Creditor Committee under the G20’s Common Framework on June 11, 2024. This agreement provided crucial financial assurances, facilitating the completion of the second ECF review. Moreover, authorities have recently reached a preliminary agreement with Eurobond holders on restructuring terms aligned with program guidelines.

    Despite a positive outlook, the IMF advises caution due to potential risks, notably those associated with the upcoming general elections in December 2024.

    “Going forward, perseverance in macroeconomic policy adjustment and reforms is essential to fully restore macroeconomic stability and debt sustainability, while fostering a sustainable increase in economic growth and poverty reduction.”

    The IMF recommends that Ghana continue to focus on mobilizing domestic revenue, streamlining public spending, and finalizing its comprehensive debt restructuring. The Fund also stresses the importance of maintaining a tight monetary stance, enhancing exchange rate flexibility, and implementing banks’ recapitalization plans to ensure financial sector stability.

  • IMF releases $360m to Ghana for post-COVID economic recovery

    IMF releases $360m to Ghana for post-COVID economic recovery

    Ghana has obtained approval from the International Monetary Fund (IMF) Board for the second review of the IMF-supported Program for Economic Growth (PC-PEG) post-COVID-19.

    This approval enables the immediate disbursement of SDR 269.1 million (approximately US$360 million) to Ghana.

    The IMF praised Ghana’s overall performance under the program, noting that all quantitative performance criteria for the second review and nearly all indicative targets were met. The institution also highlighted significant progress in debt restructuring and advancing key structural reforms.

    According to the IMF’s statement on Friday, Ghana’s reform efforts are yielding positive results, with stronger-than-expected growth resilience, rapid inflation decline from 2022 highs, and substantial improvements in fiscal and external positions.

    In a statement on X, Finance Minister Dr. Mohammed Amin Adam affirmed Ghana’s steadfast commitment to implementing robust reform measures aimed at ensuring macroeconomic stability.

    Dr. Adam expressed gratitude to President Akufo-Addo for his strong leadership and acknowledged the IMF’s unwavering support for Ghana’s economic goals.

    “Ghana has today secured IMF Board Approval for the 2nd review of the IMF-supported PC-PEG. This will trigger the release of the third tranche of $360million under the ECF. We remain committed to implementing our strong reform programme, towards ensuring macroeconomic stability.”

    “I thank the President for his strong leadership; the IMF for their commitment to Ghana; our bilateral & development partners for their staunch support;& all the hardworking staff of the @MoF_Ghana for their tireless efforts to entrench Ghana’s economic stability #GhanaRising,” he stated.

  • Ghana’s economy will grow bigger and better this year – Finance Minister

    Ghana’s economy will grow bigger and better this year – Finance Minister

    Finance Minister, Dr. Mohammed Amin Adam, has confidently announced that Ghana’s economy is set for a strong recovery this year, despite recent challenges.

    He highlighted that the economy is surpassing expectations, demonstrating robust growth rates that have surprised international organizations like the IMF and World Bank.

    For instance, Ghana exceeded growth projections of 1.5% last year, achieving 2.9%, and surpassed this year’s forecasted growth of 3.1% with an impressive 4.7% growth in the first quarter.

    “This year, our economy is going to surprise the world.

    Dr. Amin Adam emphasized, “I can tell you that this economy is rebounding strongly. We are rebounding strongly, and it is surprising the world, even the IMF, the World Bank. They are all surprised. Last year, they projected our economy would grow at 1.5%, but we grew at 2.9%. In the first quarter of this year, they projected we would grow at 3.1%, but we grew at 4.7%,” Dr. Amin Adam said during a Town Hall meeting held in the UK over the weekend.

    He further stated, “This economy will grow, and it will grow faster than everyone thinks.”

    Addressing concerns about the Ghana cedi’s depreciation against the US dollar, he assured that measures are in place for the cedi to strengthen, aiming for a comeback after a challenging period where it depreciated by 20.1% in 2024.

    Currently trading at approximately GH¢15.50 per dollar in major forex bureaus, the finance minister remains optimistic about the currency’s future performance.

  • Ghana’s debt restructuring is over – Finance Minister

    Ghana’s debt restructuring is over – Finance Minister

    Finance Minister Dr. Mohammed Amin Adam has announced the successful completion of Ghana’s debt restructuring program with its official creditors.

    According to the Karaga Member of Parliament, the government has restructured $5.1 billion in debt with these creditors and has also finalized the restructuring of $13.1 billion with Eurobond holders.

    Speaking at a UK Town Hall meeting, Dr. Amin Adam emphasized that these efforts have led to savings of $8 billion for the country.


    “Last two weeks, we concluded negotiations with the official creditors, and we have agreed to restructure 5.1 billion dollars, I am telling you that the government is good in negotiations and of this amount, we are going to make savings of $2 billion.”

    “As I speak to you, tomorrow morning, there will be an announcement that we have also concluded our negotiations with the Eurobond Holders of $3.1 billion and ladies and gentlemen when we announce it, please read the details. We have negotiated a good deal for Ghana and that is $8 billion,” he said.

    “Ideally, government should not be held responsible for the investment decisions of individuals, but this government is so caring.

    “Mistakes were made and people were not well-informed, and they didn’t know who to consult to be advised, but we also know that the people who are affected are suffering, and we have heard that some people have died and others had to commit suicide.”


    “This government is so caring that in the first place, we granted some bailout to all the affected and I want to tell you again that the President has directed that we do another bailout. So between now and October, we will release ¢1.5 billion to the affected people.”

    The government recently secured a deal with bilateral creditors to delay interest payments and postpone the maturity date of restructured debt.

    To meet its IMF target, Ghana, with an economy valued at $77 billion, must reduce its debt to 55% of GDP by 2028, down from a projected 109% before restructuring began.

    The current agreement with bondholders would leave the debt slightly above this target. However, Ghana’s economy performed better than expected in 2023, growing by 2.9% compared to the IMF’s initial target of 1.5%.

    This improved performance means a revised Debt Sustainability Analysis (DSA) can accommodate the bondholder agreement, according to Finance Minister Dr. Mohammed Amin Adam.

    Ghana started its debt restructuring efforts over a year ago as part of an IMF deal, reaching a preliminary agreement in January to restructure $5.4 billion in obligations under the Group of 20 Common Framework for Debt Treatment. This set the stage for restructuring Eurobond debt.

  • IMF will approve our second review – Finance Minister expresses optimism

    IMF will approve our second review – Finance Minister expresses optimism

    Finance minister, Dr. Amin Adam is optimistic about the approval of the third tranche funding support of $360 million from the International Monetary Fund (IMF) after its review.

    His confidence stems from the government’s attainment of a significant milestone in its debt restructuring process with bilateral creditors.

    According to Dr. Amin Adam, Ghana has fulfilled all the necessary criteria for the Fund to endorse the third tranche funding.

    He foresees no obstacles in the days ahead.

    “We are very confident they will approve our second review because we have met all the requirements. The last hurdle was the agreement. We needed to meet with the bilateral creditors which we have now met. We do not anticipate any challenges,” the finance minister said in a report on myjoyonline.com.

    By the end of June 2024, the country’s proposal for the second review program, seeking a third tranche funding of $360 million, is set to be presented to the Executive Board of the IMF.

    During this meeting, decisions will be made regarding the approval and distribution of additional funds within the framework of the country’s Extended Credit Facility (ECF) program with the IMF, aimed at promoting economic recovery and stability.

    The government has successfully negotiated a Memorandum of Understanding (MoU) with its Official Creditor Committee.

    This MoU agreement is instrumental in facilitating the IMF’s evaluation of Ghana’s progress within a 3-year economic support program.

  • MoU from Official Creditors’ will expedite IMF Board’s approval of US$360m – IMF MD

    MoU from Official Creditors’ will expedite IMF Board’s approval of US$360m – IMF MD

    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.”

  • IMF assures Ghana of receiving third tranche of funds by the end of June 2024

    IMF assures Ghana of receiving third tranche of funds by the end of June 2024

    The International Monetary Fund (IMF) has announced that Ghana is expected to receive the third installment of $360 million by the end of this month, as the nation grapples with the depreciation of its cedi against the strengthening US dollar.

    During its most recent press briefing on June 6, the IMF stated that its goal is to help Ghana secure Board approval for the disbursement of $360 million by the end of this month. This announcement was made by Julie Kozack, the IMF’s Director of Communication.

    “Our aim is to bring the review to the IMF’s Executive Board for approval before the end of June. This would give Ghana access to $360 million in financing, bringing the total to about $1.6 billion in disbursements since May of 2023,” she indicated.

    According to the Fund, Ghana’s “strong policy and reform efforts under the three-year programme are bearing fruit and signs of economic stabilisation are emerging. For example, growth in 2023 was higher than we had initially envisaged.”

    The IMF also indicated that the authorities are also making good progress on their comprehensive debt restructuring. “The domestic debt exchange was completed last year, and in January 2024 the government reached an agreement in principle with its official bilateral creditors. Ghana is also engaging its external private creditors to seek their support,” the Fund stressed.

    Looking ahead

    Ghana is currently in dire need of dollars! Despite reaching an IMF Staff-Level Agreement nearly two months ago, the country has not yet fulfilled all the required conditions to unlock the third tranche of its IMF loan. However, sources familiar with the debt restructuring talks indicate that negotiations and agreements are nearing completion at the bilateral level.

    Consequently, the ongoing monetary policy tightening in the US, coupled with Ghana’s ever-increasing import bill, has put immense pressure on the cedi, which has depreciated by more than 20% against the US dollar since the start of the year.

    Looking ahead, the IMF believes “steadfast policy and reform implementation will be crucial to fully and durably restore macroeconomic stability and debt sustainability in Ghana” and that the “government has committed to continue implementing the programme as envisaged to ensure sustainable growth and support poverty reduction.”

    Debt Sustainability

    Recent data from the Bank of Ghana reveals that the nation’s total public debt has surged to GHS658.6 billion, nearly double the amount recorded in December 2022 prior to the implementation of the Domestic Debt Exchange Programme (DDEP).

    According to the IMF, “at each review, including this one, that is in progress, the IMF does provide not only a full update of the economic situation and the macroeconomic projections, but also the debt sustainability analysis. The latest DSA will be published with the Staff Report after the Board considers the second review of the programme. And of course, also just to reiterate that it is now important for the government to continue to make progress, as it has been doing with its creditors, to ultimately restore debt sustainability for the country.”

  • Ghana’s $360m third tranche to be approved by IMF Board by end of June

    Ghana’s $360m third tranche to be approved by IMF Board by end of June

    Ghana’s second review program for a third tranche of US$360 million is anticipated to be presented to the Executive Board of the International Monetary Fund (IMF) by the end of June 2024.

    This review aims to secure approval and the subsequent disbursement of additional funds under the country’s Extended Credit Facility (ECF) program with the IMF, supporting economic recovery and stability.

    “Our aim is to bring the review to the IMF’s Executive Board for approval before the end of June,” Julie Kovack, the Director of the Communications Department at the IMF said this during a press briefing on Thursday, June 6.

    “This would give Ghana access to US$360 million in financing, bringing the total to about US$1.6 billion in disbursements since May of 2023,” she noted. 

    This development follows the country reaching a staff-level agreement on economic policies and reforms for the second review of the program on April 13, 2024.

    Since then, Ghana has received a draft Memorandum of Understanding (MoU) from its Official Creditors and is currently reviewing it before signing to formally conclude negotiations.

    Looking ahead, steadfast implementation of policies and reforms will be crucial to fully and durably restore macroeconomic stability and debt sustainability in Ghana.

    Reflecting on the progress of the three-year loan-support program, Ms. Kovack highlighted that the Ghanaian authorities’ strong policy and reform efforts are yielding results, with signs of economic stabilization beginning to emerge.

    “For example, growth in 2023 was higher than we had initially envisaged,” she said.

  • Without DDEP securing IMF bailout would have been difficult – BoG

    Without DDEP securing IMF bailout would have been difficult – BoG

    Director of Research at the Bank of Ghana (BoG), Dr. Philip Abradu-Otoo, has clarified that obtaining a bailout from the International Monetary Fund (IMF) would have been difficult without implementing the Domestic Debt Exchange Programme (DDEP).

    To stabilize the economy, the government initiated the IMF program and introduced the DDEP, which led to some bondholders experiencing reductions in their investments and coupons.

    In 2022, the BoG reported a loss of GHS 60.9 billion due to impairments from the domestic debt exchange program.

    In an interview with Bernard Avle on The Point of View on Citi TV, Dr. Abradu-Otoo highlighted the challenges the government would have faced without the DDEP, noting that they would have needed to revisit other components of the program.

    Dr. Abradu-Otoo attributed the BoG’s 2022 losses to the domestic debt exchange program.

    “The biggest one was the impairment we had on the securities we were holding. Like any other individual, the BoG also held government securities. Out of that GHS 60.9 billion, GHS 48 billion were impairments—losses incurred on our books due to the DDEP.”

    He emphasized, “For the debt exchange program, nobody had a haircut on the principal. For the BoG, we had a side haircut, a top haircut, and the amount itself was cut into two. We had three cuts because we needed to secure the IMF program. It would have been tough to move forward quickly. Then we would have had to revisit other parts of the DDEP.”

    When asked if the BoG would have disagreed with the impairment if given the choice, he confirmed, “Yeah.”

    A Memorandum of Understanding (MoU) for the early recapitalization of the Bank of Ghana is expected to be signed by the end of the third quarter of this year. This follows significant losses by the Central Bank for two consecutive years.

    The MoU is a strategic move to restore the financial health of the central bank and improve its equity position after posting a GHS 10.5 billion loss in 2023 due to high expenditure related to monetary interventions and a GHS 60.9 billion loss in 2022 from impairments during the domestic debt exchange program.

    The Ministry of Finance and the Bank of Ghana will sign the MoU to ensure the Central Bank can continue its mandate of managing monetary policy and ensuring price stability.

    “The biggest one was the impairment we had on the securities that we were holding. Just like any other individual, the BoG was also holding government securities. Out of that GHS 60.9 billion, GHS 48 billion of that were impairment. That is the losses that we incurred on our books, as a result of the DDEP.

    He emphasised, “For the debt exchange programme, nobody had a haircut on the principal…for the BoG, we had the side haircut, and top haircut and the amount itself was cut into two. We had three, we had to do that because we needed that to secure the IMF programme. It would have been tough to move forward very fast. Then we would have come back to the drawing board and relook at the other parts of the DDEP.”

  • Akufo-Addo lauds Chinese govt for assistance in securing IMF funds for Ghana

    Akufo-Addo lauds Chinese govt for assistance in securing IMF funds for Ghana

    President Nana Addo Dankwa Akufo-Addo has lauded the Chinese government for its assistance in securing a three billion dollar IMF bailout for Ghana.

    While expressing Ghana’s appreciation to China’s departing Ambassador, Lu Kun, the President commended his efforts in bolstering diplomatic, trade, and investment ties between the two nations.

    During a farewell meeting, President Akufo-Addo highlighted Mr. Kun’s role as Co-Chair of Official Creditors within the G20 Common Framework, his contribution to elevating trade volumes to over 11 billion dollars, and his support in funding projects like the Jamestown Fishing Harbour.

    Since assuming office in Ghana in 2021, bilateral relations between Ghana and China have significantly strengthened over the past three years.

    Trade between the two countries has surged to a historic high of 11 billion dollars, with Chinese investors undertaking numerous development initiatives.

    Lu Kun has been pivotal in Ghana’s negotiations with Official Creditors under the G20 Common Framework, particularly in securing comprehensive debt treatment beyond the Debt Service Suspension Initiative, a crucial aspect of Ghana’s IMF program.

    Moreover, during his tenure, Beijing provided financing for key infrastructure projects such as the Jamestown Fishing Harbour, the Tamale Interchange, and the second phase of the University of Health and Allied Sciences.

    President Akufo-Addo expressed Ghana’s profound gratitude to Mr. Kun for his service during his tenure, stating that Ghana will always remember and appreciate his steadfast support.

    In turn, outgoing Chinese Ambassador Lu Kun expressed his appreciation for the support he received during his time in Ghana, reflecting on the various projects undertaken during his tenure.

    Mr. Lu Kun is now returning to China following his retirement.

  • Ghana nears earning IMF Board approval for third tranche of 360m dollars

    Ghana nears earning IMF Board approval for third tranche of 360m dollars

    Ghana is poised to obtain board approval from the International Monetary Fund (IMF) for the third installment of $360 million from its extended credit facility worth $3 billion.

    The government’s ongoing assistance program, designed to stabilize the economy and promote sustainable growth, is reportedly yielding results surpassing initial expectations.

    To date, Ghana has received $1.2 billion in IMF funding, earmarked for fiscal consolidation, bolstering foreign exchange reserves, and facilitating overall economic recovery.

    According to the IMF, Ghana is approaching the approval phase for the subsequent disbursement, having consistently met the requisite economic and policy benchmarks.

    Julie Kozack, IMF’s Director of Communications, expressed confidence in Ghana’s progress and emphasized the IMF’s support during a recent press briefing in Washington, D.C.

    “On April 13th, IMF staff and the Ghanaian authorities reached a staff-level agreement for the second review of the programme. The aim is to bring the review to the IMF’s Executive Board before the end of June, and once approved by the Board, the review would give Ghana access to about $360 million.

    The authorities’ strong policy and reform efforts under the programme are bearing fruit, and signs of economic stabilization are emerging.”

    Ghana is expected to get approval for its third tranche of $360m when the Executive Board of the IMF meet in June, having reached a staff-level agreement on the second review of the loan-support programme.

    The Fund has stated that the fund will not require the Ghanaian government to implement additional adjustments.

    The government has expressed optimism that ongoing discussions among official creditors will facilitate the conclusion of talks, enabling the release of the third tranche of funds.

    “Growth, for example, in 2023, was higher than anticipated, and the growth projections are being revised upward.

    Inflation has been declining rapidly, the fiscal and external positions have improved, and exchange rate volatility has declined quite significantly. The authorities are making good progress on their comprehensive debt restructuring.

    The domestic debt exchange was completed last year, and on January 12th, the government reached agreement in principle with its official bilateral creditors.

    Ghana is also engaging with external private creditors to seek their support”, Julie Kozack added.

  • IMF board set to approve $360m third tranche for Ghana

    IMF board set to approve $360m third tranche for Ghana

    Ghana is making strides toward securing board approval from the International Monetary Fund (IMF) for the third tranche of $360 million under its $3 billion extended credit facility.

    The government’s ongoing support program, aimed at stabilizing the economy and fostering sustainable growth, is yielding better-than-expected results.

    To date, Ghana has received $1.2 billion in IMF funding, which has aided fiscal consolidation, bolstered foreign exchange reserves, and supported general economic recovery.

    The IMF acknowledges Ghana’s progress toward the next disbursement, noting that the country continues to meet necessary economic and policy benchmarks.

    Julie Kozack, Director of Communications at the IMF, spoke about Ghana’s status during a recent press conference in Washington, D.C., expressing confidence and support from the IMF.

    Ghana is poised to receive approval for its third tranche of $360 million when the IMF Executive Board convenes in June, following a staff-level agreement on the second review of the loan-support program.

    The Fund has indicated that additional adjustments will not be required from the Ghanaian government.

    The government is hopeful that ongoing discussions among official creditors will lead to the conclusion of talks, facilitating the release of the third tranche of funds.

    Julie Kozack also highlighted positive economic indicators, such as higher-than-anticipated growth in 2023, declining inflation, improved fiscal and external positions, and reduced exchange rate volatility.

    She noted Ghana’s progress on comprehensive debt restructuring efforts, including engagements with official bilateral and external private creditors.

    “On April 13th, IMF staff and the Ghanaian authorities reached a staff-level agreement for the second review of the programme. The aim is to bring the review to the IMF’s Executive Board before the end of June, and once approved by the Board, the review would give Ghana access to about $360 million. The authorities’ strong policy and reform efforts under the programme are bearing fruit, and signs of economic stabilization are emerging.”

    “Growth, for example, in 2023, was higher than anticipated, and the growth projections are being revised upward. Inflation has been declining rapidly, the fiscal and external positions have improved, and exchange rate volatility has declined quite significantly. The authorities are making good progress on their comprehensive debt restructuring. The domestic debt exchange was completed last year, and on January 12th, the government reached agreement in principle with its official bilateral creditors. Ghana is also engaging with external private creditors to seek their support”, Julie Kozack added.

  • Ghana’s policy makers to blame for cedi fall – IEA

    Ghana’s policy makers to blame for cedi fall – IEA

    The Institute of Economic Affairs (IEA) has sharply criticized economic managers for their repeated failure to proactively address the cedi’s depreciation, resulting in unsustainable and reactive measures.

    According to the IEA, policymakers have consistently neglected to implement necessary strategies to support the cedi. Instead, they resort to emergency interventions only when the situation becomes critical.

    “The question being asked by most people is: what is the solution to the evolving cedi crisis and how do we prevent similar future episodes? To lay economists, the solution may seem monumental—or that is what our economic managers would want us to believe. However, to some of us who are lucky to be more tutored in the subject, we do not see the solution to be rocket science,” the statement read.

    The IEA pointed out that policymakers typically wait until the crisis worsens before employing temporary, unsustainable measures.

    For instance, the current approach relies heavily on funding from the IMF and other development partners to restore stability, which history has shown to be unsustainable.

    In response to public concern, the IEA outlined practical measures to achieve lasting stability for the cedi, addressing the root causes of foreign exchange demand and supply. These measures include:

    a. Acceleration of External Debt Restructuring
    The government should promptly engage with the IMF and external creditors to expedite the external debt restructuring process. This would allow the IMF to release $300 million under the Economic Credit Facility programme, which, in turn, would unlock additional funds from other development partners, boosting the Bank of Ghana’s reserves and stabilizing the FX market.

    b. Enforcement of FX Market Regulations
    The Bank of Ghana (BoG) should enhance the enforcement of foreign exchange market regulations, including FX carry-on limits, supportive documentation for FX purchases and transfers, and prohibitions on pricing and payments in FX. These regulations would help limit FX demand and prevent speculative activities.

    c. Checks on Illegal FX Dealings
    The BoG’s Economic Intelligence Unit, in collaboration with security agencies, should monitor and curb illegal FX transfers and money laundering activities through banks, forex bureaux, and other channels. This would reduce the demand for FX and contribute to the cedi’s stability.

    The IEA emphasized that these measures should be implemented concurrently across various phases—firefighting, short-term, medium-term, and long-term—to achieve maximum impact.

  • IMF program blamed for cedi depreciation

    IMF program blamed for cedi depreciation

    An economist and finance expert, Professor Godfred Bokpin, has linked some of the cedi’s devaluation to the International Monetary Fund‘s (IMF) program with Ghana.

    He explained that during the IMF program, the Central Bank was restricted from intervening in the currency exchange market when the cedi depreciated against major trading currencies.

    This restriction hindered the Bank of Ghana (BoG) from participating in the foreign currency market to stabilize the cedi.

    Prof. Bokpin made these remarks during an interview on a local radio station, which was monitored by the Ghana News Agency (GNA) over the weekend.

    “Part of the reason the cedi is depreciating is also consistent with the latest IMF-supported program. Under the IMF-supported programme, they favour a stable exchange rate.

    “This limits the ability of the central bank to be in the market and fight off the depreciation through our reserves.

    “Part of the IMF programme is to build our reserve of three months of import cover for 2026…What that means is that it tightens the hands of the central bank to intervene in the market to sell dollars to stabilise the cedi.

    “Now they cannot do that under an IMF programme,” he said.

    In May 2023, the IMF Executive Board sanctioned a US$3 billion External Credit Facility (ECF) with Ghana spanning 36 months.

    Prof. Bokpin further pinpointed additional factors influencing the recent depreciation of the cedi.

    He noted that the currency’s devaluation was also sparked by the delayed restructuring of foreign debt, impacting the disbursement of the third tranche of the ECF within the IMF program.

    Despite Ghana’s failure to reach a final debt agreement with its official bilateral creditors, the IMF has pledged to disburse the third tranche amounting to $360 million.

    During the discussion, Mr. Charles Kusi Appiah Kubi, a representative of the Ghana Union of Traders Association (GUTA) and a panelist, proposed prioritizing retention policies to stabilize the cedi, as multinational companies might face restrictions on repatriating profits.

    Dr. Kwabena Nyarko Otoo, Director of Research for the Trade Union Congress, also urged the Central Bank to tackle the unregulated foreign exchange trade in Ghana, particularly in the black market, to alleviate pressure on the cedi.

  • Control excessive spending to stabilize cedi – Minority to govt

    Control excessive spending to stabilize cedi – Minority to govt

    The Minority in Parliament has called on the government to stick to fiscal consolidation and rein in excessive spending to curb the depreciation of the cedi.

    Speaking to the press in Parliament, Minority Leader Dr. Cassiel Ato Forson accused the government of overspending and awarding contracts in billions of US dollars without proper budgetary and parliamentary approval, contributing to the weakening of the cedi.

    “Our cedi is depreciating because the government is on an expenditure spree, spending money as if there is no tomorrow,” he alleged. As we speak, we are aware that they are awarding contracts in billions of US dollars without budgetary and parliamentary approval,” he added.

    Dr. Forson, who also represents the National Democratic Congress (NDC) for Ajumako-Enyan-Esiam, outlined several factors contributing to the cedi’s decline, including the Bank of Ghana’s (BoG) policies, such as mixed cash reserve ratios and maintaining segmented foreign exchange markets.

    Despite significant foreign exchange inflows from international bodies like the IMF and World Bank, Dr. Forson criticized the government’s management of the cedi, attributing its continued depreciation to poor decision-making.

    He highlighted the adverse effects of the cedi’s depreciation on the prices of goods and services, leading to increased costs for consumers and worsening economic conditions for Ghanaians, especially importers facing higher expenses for the same quantity of goods.

  • Depreciation of cedi may impede IMF program – Ato Forson

    Depreciation of cedi may impede IMF program – Ato Forson

    The Minority Leader in Parliament, has voiced apprehensions regarding the government’s management of the Ghanaian cedi, Dr. Cassiel Ato Forson, foreseeing potential disruption to the International Monetary Fund (IMF) program by year-end.

    Dr. Forson criticized the government’s fiscal strategies, suggesting that efforts to stabilize the national currency are insufficient and could have adverse economic repercussions.

    On Wednesday, May 15, the minority caucus raised alarm over the government’s recent borrowing of GH¢7 billion from the treasury bills market to compensate contractors outside its budgetary allocations.

    According to the Minority, this practice of exceeding budget limits for political reasons is exacerbating the depreciation of the Cedi against the dollar.

    In an interview with Bernard Avle on the Citi Breakfast Show on Thursday, the minority leader highlighted the likelihood of the IMF program encountering setbacks, which was initially progressing well.

    “I must be frank; this program is likely to veer off course by the end of this year, and rectifying it will take time. I am certain of that… let’s wait and observe. It primarily hinges on the fiscal aspect,” he remarked.

    Dr. Ato Forson further elucidated that the forthcoming IMF review, pivotal for releasing the third tranche of the 3 billion External Credit Facility, would rely on outdated data from the previous year, failing to accurately reflect the current economic scenario.

    “Let me be honest with you, this programme is certainly going to be derailed by the end of this year and it is going to take a while. I have no doubt about that… let’s wait and see. It is actually on the back of the fiscal,” he stated.

    “They were on course but as you know the review dates back. So, the next review is going to use the data as of December last year. So the programme indicators to check whether the programme is performing or not is going to use data six months before the time of review.

    “So, obviously six months before it was good. But I can tell you that based on the data and the way they are conducting the affairs of the policy going forward, there is going to be a complete commotion,” he stated.

  • Ghana among top 10 countries with more debt to pay to the IMF

    Ghana among top 10 countries with more debt to pay to the IMF

    As the landscape of the global economy shifts, the International Monetary Fund (IMF) assumes a vital role in extending financial aid to nations confronting economic adversities.

    A pivotal aspect of this assistance lies in offering loans to member countries, aiding in the stabilization of their economies and rectification of financial disparities.

    Consequently, countries amass debts owed to the IMF, underscoring their dependence on external financial aid.

    GhanaWeb Business delves into the top 10 nations with the highest debts to the IMF, illuminating the magnitude of their financial commitments and the ramifications for their economic trajectories.

    Remarkably, Ghana ranks among these leading countries burdened with substantial debts owed to the Fund.

    This list is derived from the IMF’s most recent debt statistics.

    See the full list below

    Egypt
    Egypt owes the IMF $11 billion.

    Angola
    Angola owes the IMF $3 billion.

    Kenya
    Kenya owes the IMF $3 billion.

    Ghana
    Ghana owes the IMF $2 billion

    Cote D’Ivoire
    Cote D’Ivoire owes the IMF $2 billion.

    Argentina
    Argentina owes the IMF $32 billion.

    Colombia
    Colombia owes the IMF $3 billion.

    Ecuador
    Ecuador owes the IMF $6 billion

    Ukraine
    Ukraine owes the IMF $9 billion.

    Pakistan
    Pakistan owes the IMF $7billion.

  • Professor Bokpin urges BoG to implement sustainable policies beyond IMF Program

    Professor Bokpin urges BoG to implement sustainable policies beyond IMF Program


    Economist Professor Godfred Bokpin encourages the Bank of Ghana (BoG) to adopt medium-to-long-term plans for maintaining Ghana’s macroeconomic stability and instilling confidence in the market.

    According to the finance professor at the University of Ghana, these measures should go beyond the current US$3 billion IMF loan-support program.

    This approach would promote the long-term stability of the Cedi against the Dollar and maintain inflation within levels conducive to economic growth and stability.

    His suggestion comes after a notable reduction in the Cedi’s depreciation against the Dollar and a decrease in inflation rates.

    Speaking to the Ghana News Agency in Accra, Prof Bokpin praised the Central Bank’s role in the country’s economic recovery but cautioned that the current macroeconomic progress is not robust.

    Before securing the IMF loan-support program, Ghana’s inflation rate was 54.1% in December 2022, dropping to 23.2% in December 2023, but rising to 25.8% by March 2024.

    President Nana Addo Dankwa Akufo-Addo reported a nine percent cumulative depreciation of the Cedi between February and December 2023 during the 2024 State of the Nation address in February.

    Nonetheless, Prof Bokpin emphasizes the necessity for the Central Bank to devise a medium-to-long-term strategy beyond reliance on the IMF program for maintaining macroeconomic credibility and trust.

    “The gains made so far is quite fragile, so we must work hard to consolidate it beyond the expiration of the IMF programme by being disciplined and efficient with our expenditure as we’re in an election year,” he recommended.

    Additionally, Prof Bokpin advocated for structural changes to ensure the Central Bank’s independence. He highlighted instances where the Bank resisted certain government decisions but ultimately yielded to governmental influence.

    “From the COVID-19 pandemic era, the pronouncement of the Governor showed signals to the market that he was not happy with the way the fiscal side was intruding into the monetary side of the economy, but he succumbed to that political cannibalisation,” he said.

    He also mentioned that the Central Bank vehemently opposed the haircut proposed under the Domestic Debt Exchange Programme (DDEP) and actively resisted it during the 2023 spring meetings.

    Nonetheless, the Bank had no choice than to sacrifice its balance sheet, leading to the BoG suffering a 50 per cent haircut on government’s debt, something the Bank said it did “to save the economy from collapsing”.

    “The Central Bank must be bold in saying that the fiscal side is messing us up; when they admit and speak truth to power, without fearing that they’ll be fired, this country will begin to have a turn for good,” Prof Bokpin said.

  • Pay attention to sustainable strategies over the IMF program – Professor Bokpin to BoG

    Pay attention to sustainable strategies over the IMF program – Professor Bokpin to BoG

    Finance expert at the University of Ghana, Professor Godfred Bokpin, has urged the Bank of Ghana (BoG) to implement medium-to-long-term strategies aimed at sustaining Ghana’s macroeconomic stability and bolstering market confidence.

    These measures, according to him, should go beyond the current US$3 billion loan-support program with the International Monetary Fund (IMF) to ensure the long-term stability of the Cedi against the dollar and to keep inflation within a range conducive to economic growth and stability.

    His recommendation comes in light of recent efforts to contain the depreciation of the Cedi against the Dollar and to manage inflation.

    While acknowledging the Central Bank’s role in the country’s economic recovery, Professor Bokpin emphasized that the macroeconomic progress observed thus far is not sufficiently robust.

    Prior to obtaining the IMF loan-support program, Ghana’s inflation rate stood at 54.1 percent in December 2022, decreased to 23.2 percent in December 2023, and then rose to 25.8 percent by March 2024.

    President Nana Addo Dankwa Akufo-Addo revealed in his February 2024 State of the Nation address that the Cedi had experienced a cumulative depreciation of nine percent between February and December 2023.

    However, Professor Bokpin emphasised the need for the Central Bank to engage in introspection and develop a medium-to-long-term strategy to ensure macroeconomic credibility and trust beyond reliance on an IMF program.

    “The gains made so far are quite fragile, so we must work hard to consolidate them beyond the expiration of the IMF programme by being disciplined and efficient with our expenditures as we’re in an election year,” he recommended.

    Prof. Bokpin also called for structural reforms that would guarantee the independence of the Central Bank, citing cases where the Bank opposed some government decisions yet had to succumb to government pressure.

    “From the COVID-19 pandemic era, the pronouncement of the Governor showed signals to the market that he was not happy with the way the fiscal side was intruding into the monetary side of the economy, but he succumbed to that political cannibalization,” he said.

    He also stated that the Central Bank expressed a strong disapproval of the haircut under the Domestic Debt Exchange Programme (DDEP) and fought against it during the 2023 spring meetings.

    Nonetheless, the Bank had no choice but to sacrifice its balance sheet, leading to the BoG suffering a 50 percent haircut on the government’s debt, something the Bank said it did “to save the economy from collapsing.”.

    “The Central Bank must be bold in saying that the fiscal side is messing us up; when they admit and speak truth to power, without fearing that they’ll be fired, this country will begin to have a turn for good,” Prof. Bokpin said.

  • IMF urges stringent tariff adjustments to ensure cost recovery in the energy sector

    IMF urges stringent tariff adjustments to ensure cost recovery in the energy sector

    Deputy Director of the IMF, Ms. Catherine Pattillo and Mr. Luc Eyraud, Division Chief of the African Department, have emphasised the need for Ghana to implement stringent reforms during a press briefing in Accra.

    These reforms are essential to empower utility service providers, allowing them to recover costs effectively. The aim is to ensure reliable and sustainable power for both household and industrial use.

    The IMF representatives also stressed the importance of creating an enabling environment for private sector involvement, particularly in increasing the use of renewable energy. They urged other African nations grappling with energy challenges to follow suit.

    Ms. Pattillo highlighted that Ghana, like many other African countries, faces obstacles due to its current tariff structure. This structure fails to adequately support high-cost recovery by utility service providers, thereby limiting their operational capacities.

    “Sometimes, the setup of the energy sector does not allow utilities to recover their costs from the charges they make to operate profitably and efficiently and supply energy as needed,” she said.

    Regarding the Fund, she said, “we are always discussing with countries how to ensure that their energy sector, which often involves a number of state enterprises, is well managed to recover their costs and provide services.”

    Mr. Eyraud emphasised the importance of recalibrating tariff systems, noting that it would help boost cost recovery.

    He also called on the government to institute mechanisms that would increase the country’s share of renewable energy through enhanced private sector participation.

    He mentioned South Africa as one country on the continent that had been doing well in the area of renewable energy, “by bringing in more private producers and reducing the barriers to entering the market.”

    In recent weeks, Ghana has been grappling with intermittent power outages, primarily stemming from financial constraints in acquiring fuel necessary for certain power plants to function at optimal levels.

    During an interview with the Ghana News Agency last week, Nana Amoasi VII, representing the Institute for Energy Security (IES), underscored the critical need to provide resources to the Electricity Company of Ghana (ECG) to address the ongoing power outages.

    “We expect the Ministry of Energy to coordinate and work with the Ministry of Finance to find alternative funding sources to deal with the challenge, specifically to procure fuel to get some of the power plants online,” he said.

    During his speech at the 2024 May Day celebration in Accra, President Nana Addo Dankwa Akufo-Addo expressed confidence in the continuity of power supply, suggesting that certain issues within the sector had been successfully addressed.

    “Over time, the issues surrounding transformers and gas supply have been successfully resolved, resulting in a significant improvement in power supply reliability,” he said.

  • Govt’s dependence on IMF, World Bank reveals lack of policy decisiveness – Analyst

    Govt’s dependence on IMF, World Bank reveals lack of policy decisiveness – Analyst

    An economy and policy analyst, Enoch Okomfo Okonah, has expressed concern over Ghana’s heavy reliance on Bretton Woods institutions for managing the Ghana Cedi, citing a lack of clear policy direction to address the nation’s economic challenges.

    Speaking with the Ghana News Agency (GNA) in Sunyani regarding the state of the economy, Okonah advocates for more assertive economic policies to bolster the Ghana Cedi, rather than depending excessively on foreign aid and borrowing.

    As the Chief Executive Officer of DUMAT Africa, a Sunyani-based economic policy think-tank, Mr Okonah underscores the need for targeted tax reforms aimed at boosting domestic production and reducing imports.

    He suggested that the government should prioritize subsidizing imports and foster a resilient local economy that favors private sector growth to tackle fiscal challenges effectively.

    This approach, he believes, would stabilize the economy, drive rapid economic expansion, and ultimately fortify the Ghana Cedi to facilitate wealth creation and poverty alleviation.

    Highlighting the importance of a robust local economy in inspiring investor confidence, Mr Okonah stressed the significance of attracting investments across various sectors.

    With the IMF deal finalized, Mr Okonah urged for sound economic policies to address the soaring market prices of food, commodities, building materials, petroleum products, and essential services.

    He emphasized the need for policies that aim to build a better society and improve the quality of life for all Ghanaians.

  • Gov’t  to reach agreement with IPPs on debt restructuring in May

    Gov’t  to reach agreement with IPPs on debt restructuring in May

    During a press briefing at the conclusion of Ghana’s participation in the IMF/WBG Spring Meetings in Washington, Finance Minister-designate Dr. Mohammed Amin Adam revealed that the government is on track to reach an agreement with Independent Power Producers (IPPs) regarding debt restructuring.

    This move is part of a larger strategy to address the energy sector’s financial challenges and reduce the deficit, which has contributed significantly to recent power outages across the country.

    Dr. Adam emphasised the importance of this agreement in alleviating the financial strain caused by accumulated debts and legacy payments in the energy sector.

    He announced that negotiations with IPPs are nearing completion, with a signed agreement expected within the next month.

    This restructuring is anticipated to significantly reduce the debt overhang and shortfall, marking a crucial step towards financial sustainability as outlined in the Energy Sector Recovery Programme.

    “As a result of these”, we have renegotiated with the IPPs to restructure the debt and once we complete the negotiations, the debt overhung, shortfall will reduce. I can tell you that in the next one month, we should be signing off with the IPPs on the restructuring of our debt,” Dr. Amin stated.

    Ghana currently faces a substantial $1.9 billion energy sector financing gap, prompting the government to take proactive measures to stabilise the sector.

    These measures include implementing the Energy Sector Recovery Programme initiated in 2019, renegotiating IPP agreements to lower generation costs, and conducting quarterly tariff adjustments to account for economic factors.

    Additionally, the government plans to procure one million revenue-efficient metres through a partnership with the World Bank, aiming to bolster revenue and improve operational efficiency within the value chain.

    “Once the shortfalls are reduced, we should be working towards bringing the sector into financial sustainability in line with the Energy Sector Recovery Programme.

    “We assure investors that while there are challenges, we’re bold as a government to take the necessary bullet for us to put the sector in a more sustainable manner so as to address the challenges that investors are usually worried about.”

    In response to these developments, the Institute for Energy Security (IES) has urged collaboration between the Energy and Finance Ministries to swiftly address the energy sector’s challenges.

    The IES emphasised the need to allocate resources to the Electricity Company of Ghana (ECG) to reduce technical and commercial losses, enhance metering systems, and improve overall distribution efficiency.

    These efforts are crucial for ensuring reliable and affordable electricity services, supporting economic growth and development in Ghana.

  • IMF promises smooth disbursement of $360m tranche without obstacles

    IMF promises smooth disbursement of $360m tranche without obstacles

    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.

  • Ghana’s programme is overdelivering – IMF Mission Chief claims

    Ghana’s programme is overdelivering – IMF Mission Chief claims

    Stéphane Roudet, the International Monetary Fund (IMF) Mission Chief for Ghana, has expressed optimism about Ghana’s economic recovery, stating that the country has likely reached its lowest point and is now poised for full recovery.

    Roudet emphasised that this positive outlook hinges on the government’s continued adherence to the IMF program, as it has been executed over the past year.

    He underscored the importance of maintaining the current trajectory of the program for sustain Ghana’s economic improvement.

    Responding to concerns about potential economic challenges stemming from global developments, Roudet dismissed the notion that Ghana’s current recovery might be short-lived. He stressed that maintaining macroeconomic stability depends on the strict implementation of the ongoing program by the government.

    Ghana’s performance under the programme

    The Mission Chief For Ghana, Stéphane Roudet, also revealed that “Ghana is overperforming under the IMF programme and that is good.”

    “Ghana’s programme is delivering on its promises and in fact, it is overdelivering,” the Mission Chief added.

    “Growth is also doing better than what we have forecasted and that is also influencing our decision to review our forecast,” he noted.

    He said the development is going to prompt them to even review the growth forecast for Ghana for 2024, saying inflation ended last year better than what they had projected.

    “We are also surprised as to how growth has performed under Ghana’s programme,” the Mission Chief added.

    He said this was never evident, at the beginning of Ghana’s programme.

    “The required revenue is being raised, and the Bank of Ghana is also doing its part to ensure that inflation is brought under control, and that is good for the programme,” he noted.

    The Mission Chief for Ghana also added that “the external position has also been doing very well; fiscal position is also adjusting in line with the programme working and delivering on its promises.”

    “Everything is moving in the right direction and this is something that was not considered at the beginning of the IMF programme.”

    Mr. Roudet emphasized that Ghana’s positive economic performance has been bolstered by the country’s unwavering commitment and dedication to implementing the IMF program.

    In terms of restoring confidence in Ghana’s economy, Roudet highlighted the importance of various stakeholders, including rating agencies and development partners, viewing the country’s economic trajectory favourably. He stressed that achieving this goal relies heavily on the continued and thorough implementation of the IMF program in the future.

    “If the macroeconomic development unfolds as we planned in the IMF programme, then definitely we should expect them to respond as well as all agencies,” the Mission Chief added.

    “We are not only looking at the rating agencies responding, Ghanaians as well, domestic stakeholders will realise that, and that will boost confidence in the economy.”

    On growth and other projections captured in reports released during the IMF/World Bank spring meetings, Stéphane Roudet noted that those were based on “old assumptions.”

    He therefore said the country should expect new numbers when they launch the Regional Economic Outlook.

    “We believe that the economy will perform better than had been projected,” Ghana Stephan Roude reiterated.

    He added, “Ghana has a growth potential average of 5 per cent going forward in the medium term.”

    “Gradually, Ghana will be able to get back to its growth potential going forward,” the Head of Mission concluded.

  • Ghana’s creditor deal delays will not hinder release of 2nd tranche IMF funds – IMF

    Ghana’s creditor deal delays will not hinder release of 2nd tranche IMF funds – IMF


    A senior IMF official has stated that the lack of a finalized debt restructuring deal between Ghana and its commercial creditors is not expected to prevent the disbursement of the impending second tranche of funds (US$360 million) under the US$3 billion Extended Credit Facility program.

    Ghana successfully completed the second review under its IMF program in April, which clears the way for the release of an additional US$360 million.

    Abebe Aemro Selassie, Director of the IMF’s African Department, provided an update on Ghana’s ongoing debt restructuring talks and their implications for the next disbursement from its US$3 billion extended credit facility during the release of the Regional Economic Outlook for sub-Saharan Africa.

    “To be clear, they (Ghana’s creditors) have provided financing assurances, though, and that remains in effect. And so, we are not envisaging that it will be an issue for our ability to conclude the next review and provide the disbursement that’s pending,” Mr. Selassie stated.

    “As we noted, we have reached staff level agreement and that’s by far the most important component for the review,” he added.

    However, he emphasized the importance of securing agreements with bilateral and commercial creditors that align with the terms agreed upon in January 2024 for continued advancement.

    “As of now, there is no MoU with bilateral creditors, but we know that there have been intense discussions in recent weeks and those are continuing and we are very hopeful that there will be agreement with bilateral official creditors,” he explained.

    Regarding private creditors, including holders of Ghana’s Eurobonds, Mr.Selassie revealed that while the government had shared proposed restructuring terms with the IMF, “the government has decided that they would not pursue this deal just yet”.

    He was optimistic that a resolution could be reached, saying: “Again, I think we’re very hopeful that there will be movement, and that they can reach agreement consistent with the programme parameters, helping lower Ghana’s debt burden at the right level and avoiding, of course, people of Ghana having to make too much sacrifice”.

    “As of now, there is no MoU with bilateral creditors, but we know that there have been intense discussions in recent weeks and those are continuing and we are very hopeful that there will be agreement with bilateral official creditors,” he explained.

    Regarding private creditors, including holders of Ghana’s Eurobonds, Mr.Selassie revealed that while the government had shared proposed restructuring terms with the IMF, “the government has decided that they would not pursue this deal just yet”.

    He was optimistic that a resolution could be reached, saying: “Again, I think we’re very hopeful that there will be movement, and that they can reach agreement consistent with the programme parameters, helping lower Ghana’s debt burden at the right level and avoiding, of course, people of Ghana having to make too much sacrifice”.

    The Ministry of Finance has acknowledged reaching an interim agreement with bondholders, though adjustments are required to meet the IMF’s debt sustainability goals. With a target of reducing external debt payments and interest costs by US$10.5 billion between 2023 and 2026, the government is focused on aligning strategies to achieve this aim.

    Dr. Mohammed Amin Adam, the Finance Minister, stressed at a recent press conference that the government is determined “to achieve an agreement acceptable to all parties while adhering to the sustainability targets outlined in its IMF-supported economic programme”.

    The ministry highlighted the country’s more ‘assertive approach’ over the past two months in talks with commercial creditors and Eurobond holders, while reiterating the importance of staying within the parameters of the IMF programme.

    Mr. Selassie underscored the significance of concluding a debt restructuring deal, stating: “Why debt relief agreement is important is that it can bring about a bit more certainty in terms of the outlook for public finances. It also engenders some confidence in economies”.

    The IMF official was, however, circumspect on providing a timeline, saying: “The negotiations take time and I am not sure I can give a timeline. This is something that is between Ghana and its creditors.”

    The debt talks are occurring against a backdrop of increasing financial strains across sub-Saharan Africa, according to the latest Regional Economic Outlook report. The report warns that the region’s governments “continue to grapple with financing shortages, high borrowing costs and roll-over risks amid persistently low domestic resource mobilisation.”

    It estimates that gross external financing needs for low-income countries will exceed US$70billion annually over the next four years. “The financing challenges are forcing countries to cut essential public spending and redirect development funds to debt service, thereby endangering growth prospects for future generations,” the report lamented.

    While expressing optimism about Ghana’s restructuring process, Mr. Selassie acknowledged that debt negotiations are always “a very painful exercise, first and foremost, of course, for the debtor country; but also creditors”.

  • “Ghana is overperforming under the IMF programme” – Stéphane Roudet

    “Ghana is overperforming under the IMF programme” – Stéphane Roudet

    The International Monetary Fund (IMF) Mission Chief for Ghana, Stéphane Roudet, has noted that Ghana is exceeding the expectations and targets set by the IMF within the framework of the programme.

    He indicated that Ghana’s economy has reached its lowest point and is now poised for full recovery.

    However, he noted that this projection hinges on the government’s continued implementation of the IMF program as it has been done over the past year.

    “Ghana’s programme is delivering on its promises, and in fact, it is overdelivering,” the Mission Chief added.

    “Growth is also doing better than what we have forecasted, and that is also influencing our decision to review our forecast,” he noted.

    Mr Roudet made the comments while responding to questions in Washington DC, USA, posed by JOYBUSINESS about concerns regarding potential economic shocks due to global developments.

    He stated that this development would prompt the IMF to review Ghana’s growth forecast for 2024, noting that inflation ended last year better than their projections.

    “We are also surprised as to how growth has performed under Ghana’s programme” the Mission Chief added.

    He said this was never evident, at the beginning of Ghana’s programme.

    “The required revenue is being raised, the Bank of Ghana is also doing its part to ensure that, and inflation is brought under control and that is good for the programme”, he noted.

    The Mission Chief for Ghana also added that “the external position has also been doing very well; fiscal position is also adjusting in line with the programme working and delivering on its promises.”

    “Everything is moving in the right direction and this is something that was not considered at the beginning of the IMF programme.”

    Mr. Roudet further explained that Ghana’s performance has been influenced by its commitment and seriousness in implementing the program. He emphasized that to fully restore confidence in Ghana’s economy, it will be crucial for various actors such as rating agencies and development partners to see continued full implementation of the IMF program.

    “If the macroeconomic development unfolds as we planned in the IMF programme, then definitely we should expect them to respond as well as all agencies” the Mission Chief added.

    “We are not only looking at the rating agencies responding, Ghanaians as well, domestic stakeholders, then everyone will realize and that will boost confidence in the economy.”

    On growth and other projections captured in reports released during the IMF/World Bank spring meetings, Stéphane Roudet noted that those were based on “old assumptions.”

    He indicated that the country should anticipate revised figures when they unveil the Regional Economic Outlook.

    “We believe that the economy will perform better than had been projected” Ghana Stephan Roude reiterated.

    He added, “Ghana has a growth potential average of 5 per cent going forward in the medium term.”

    “Gradually, Ghana will be able to get back to its growth potential going forward” the Head of Mission concluded.

  • IMF urged to maintain zero-interest-rate loans for Ghana, other low-income countries

    IMF urged to maintain zero-interest-rate loans for Ghana, other low-income countries

    Governor of the Bank of Ghana (BoG), Dr. Ernest Addison, has urged the International Monetary Fund (IMF) to maintain its zero-interest-rate loans for Ghana and other low-income countries (LICs) via the Poverty Reduction and Growth Trust (PRGT).

    During the 2024 African Consultative Group (ACG) meeting at the ongoing IMF/World Bank Group Spring Meetings in Washington, US, Dr. Addison stressed the necessity of continuing concessional financing for LICs.

    He emphasized that such financing would complement monetary policies, aiding in curbing inflationary pressures and bolstering economic recovery and resilience in low-income nations.

    Furthermore, Dr. Addison advocated for replenishing the Catastrophe Containment and Relief (CCRT) resources to provide grant support to vulnerable members in regions prone to shocks.

    He reiterated the call for improvements to the G20 Common Framework and utilizing the Global Sovereign Debt Roundtable (GSDR) to facilitate transparent and fair debt resolution, including debt cancellation for the most vulnerable members.

    Dr. Addison underscored the importance of better coordination between the IMF’s LICs facilities review and the World Bank’s IDA21 replenishment efforts to offer comprehensive support to LICs.

    Encouraging African governments to boost domestic financing, Dr. Addison highlighted its necessity amid ongoing economic recovery and resilience efforts on the continent.

    He stressed that while African countries confront multifaceted challenges and a sluggish post-pandemic recovery, relying solely on domestic adjustment policies without adequate financing would yield limited outcomes.

  • Continued drop expected in Ghana’s debt-to-GDP ratio through 2029

    Continued drop expected in Ghana’s debt-to-GDP ratio through 2029

    The IMF’s April 2024 Fiscal Monitor indicates Ghana’s Debt-to-GDP ratio will consistently decrease until 2029.

    Projections, as per a Joy Business report, foresee the ratio dropping to 69.7% by 2029, with estimates for preceding years: 83.6% in 2024, 80.9% in 2025, 77.9% in 2026, 74.9% in 2027, and 72.0% in 2028.

    Earlier IMF assessments highlighted Ghana’s improving fiscal economy, attributed to government policies focusing on stability, sustainability, and inclusive growth, as noted by Stephane Roudet, Mission Chief for Ghana.

    Roudet emphasized the government’s commitment to fiscal discipline, evidenced by improvements in the fiscal primary balance and expansion of social protection programs.

    Ghana also met non-oil revenue mobilization targets and implemented structural fiscal reforms to bolster domestic revenues and enhance transparency.

    Moreover, Ghana secured a Memorandum of Understanding (MoU) from bilateral creditors on debt restructuring, aiming to alleviate financial burdens and save costs alongside domestic debt restructuring efforts.

  • Ghana on track to reach 8% single-digit inflation rate by 2025 – IMF

    Ghana on track to reach 8% single-digit inflation rate by 2025 – IMF

    The International Monetary Fund (IMF) foresees Ghana ending 2025 with single-digit inflation, estimating it at 8%, in line with the government’s objectives.

    Ghana aims to reduce its end-year inflation from 23% to 15% in 2024, further plummeting to single digits by 2025.

    Although Ghana last achieved single-digit inflation in 2021, subsequent years witnessed a drastic rise, hitting a 22-year high of 54.1% despite a targeted rate of 31.9%.

    However, the IMF’s World Economic Outlook Report at the ongoing IMF/World Bank Spring Meetings paints a promising picture.

    This 8% projection credits the robust measures and progress achieved under the IMF program.

    The Bank of Ghana commits to staying within its 2024 end-year target band of 15%, plus or minus two percent, while expecting the disinflation trend to persist, mitigating underlying inflation risks through stringent monetary policies.

    Furthermore, the IMF predicts a robust 4.4% growth for Ghana in 2025, a marked improvement from the 2.8% forecast for 2024. Nevertheless, it anticipates a -2.2% decline in Ghana’s current account balance, reflecting trade and financial activities.

    Despite this setback, the IMF maintains an optimistic outlook, expecting a substantial economic rebound for Ghana in the coming years.

  • Ghana to end 2025 with 8% inflation rate – IMF projects

    Ghana to end 2025 with 8% inflation rate – IMF projects

    The International Monetary Fund (IMF) is projecting that Ghana will achieve single-digit inflation by the end of 2025, with an end-of-year inflation rate of 8 percent.

    The IMF’s Economic Outlook Report also forecasts an end-of-year inflation rate of 15 percent for 2024, which is consistent with the Bank of Ghana’s inflation projection for the same year, according to a JoyBusiness report.

    The projection is based on the measures implemented by the government under the IMF program and the Bank of Ghana’s commitment to maintaining tight monetary measures to address inflation pressures.

    However, there have been no official reasons provided by the IMF for this projection.

    The Bank of Ghana has set an inflation target of 15 percent “Plus 2 or Minus two” for 2024, meaning inflation could range from 13 percent to 17 percent by the end of the year.

    However, there are concerns about whether the government will meet its 15 percent target as projected in the 2024 Budget, especially with recent increases in the prices of petroleum products and the potential hike in transport fares.

    Despite these concerns, Bank of Ghana Governor Dr. Ernest Addison expects inflation to decrease in the coming months, stating that the Bank has no intention of revising its end-of-year target.

    Ghana last recorded single-digit inflation in July 2021. If the IMF’s projection is accurate, Ghana could return to single-digit inflation by the end of 2025.

    Before April 2020, inflation had remained stable at 7.8 percent for three months. However, the onset of the COVID-19 pandemic led to a spike in inflation, reaching 10.6 percent in April before declining to 9.8 percent in November 2020.

    As of March 2024, Ghana’s inflation stood at 25.8 percent, compared to 45.0 percent in March 2023.

  • Ghanaians wish you well – Akufo-Addo congratulates IMF’s Kristalina for securing 2nd term

    Ghanaians wish you well – Akufo-Addo congratulates IMF’s Kristalina for securing 2nd term

    President Akufo-Addo has extended congratulations to Kristalina Georgieva for securing a second five-year term as IMF Managing Director, commencing on October 1, 2024.

    Ms. Georgieva was the sole candidate nominated for the position, and the Board’s decision was reached following a series of discussions, including with Ms. Georgieva, as per the selection process established on March 13, 2024.

    In a post on social media, President Akufo-Addo expressed Ghana’s delight regarding her re-appointment.

    He noted that her role in ensuring global financial stability and development in general, particularly in Emerging Market and Developing Economies (EMDEs) and Low-Income-Countries (LICs), have impacted greatly lives and livelihoods.

    “We have no doubt that she will make an even greater impact in her second term in helping to eradicate poverty, with ample economic opportunities and jobs, especially for LICs.

    “We, in Ghana, recognise her admirable contributions to our nation’s turnaround to restoring macroeconomic stability and economic recovery, from the difficult economic circumstances of the last few years.

    “We expressed our appreciation directly to her during her recent visit to Ghana. On behalf of the Government and people of Ghana, I congratulate Kristalina Georgieva on her well-deserved re-appointment. We wish her well,” he added.

    Ms. Georgieva has been serving as Managing Director of the IMF since October 1, 2019. In this role, she is the head of the IMF’s operational staff and chairs the Executive Board.

    Ms. Georgieva is supported by four Deputy Managing Directors in overseeing the Fund’s operations, which involve approximately 3,100 staff members.

    A Bulgarian national, Ms. Georgieva has held various prominent positions prior to her role at the IMF. She was previously the Chief Executive Officer of the World Bank from January 2017.

    Additionally, she served as the Interim President for the World Bank Group from February 1, 2019, to April 8, 2019. Ms. Georgieva also has a background in the European Commission, where she held roles such as Commissioner for International Cooperation, Humanitarian Aid, and Crisis Response, as well as Vice President for Budget and Human Resources.

    Ms. Georgieva’s academic qualifications include a Ph.D. in Economic Science and a M.A. in Political Economy and Sociology from the University of National and World Economy in Bulgaria. She also taught at the same university from 1977 to 1991.

  • IMF forecasts Ghana’s economic growth rate to reach 4.4% in 2025

    IMF forecasts Ghana’s economic growth rate to reach 4.4% in 2025


    Ghana’s economic outlook for 2025 is promising, with a projected robust growth rate of 4.4 percent, as forecasted by the International Monetary Fund (IMF).

    This prediction marks a significant increase from the previously projected growth rate of 2.8 percent for 2024.

    The IMF announced this forecast during its latest April World Economic Outlook at the ongoing IMF-World Bank Spring Meetings in Washington DC, USA, underscoring growing optimism about Ghana’s economic trajectory.

    Notably, Ghana’s projected economic growth rate for 2025 surpasses that of some of its counterparts in Sub-Saharan Africa, signaling positive signs of recovery from the economic impacts of unsustainable debt levels, inflationary pressures, and currency volatility following the COVID-19 pandemic.

    However, the IMF anticipates a decline in Ghana’s current account balance, projected at -2.2 percent. Despite this, the IMF maintains a positive outlook for Ghana’s economy, anticipating a rebound in 2025.

    In December 2022, Ghana faced one of its severest economic downturns, defaulting on payments for most of its external debt totaling $30 billion. Consequently, the country was excluded from international capital markets and turned to domestic treasury bill markets for borrowing.

    Under its 17th IMF bailout program, Ghana recently reached a staff-level agreement with the IMF Mission team on April 13, 2024, for a second review, paving the way for a third installment of bailout funds amounting to $360 million.

    During a joint press conference held in Accra, IMF Mission Chief to Ghana, Stephane Roudet, urged Ghanaian authorities to negotiate a deal with commercial and bilateral creditors for the IMF Management and Executive Board to approve the next disbursement.

  • Your contributions to Ghana’s economic recovery admirable – Akufo-Addo tells IMF Managing Director

    Your contributions to Ghana’s economic recovery admirable – Akufo-Addo tells IMF Managing Director

    President Akufo-Addo has congratulated Kristalina Georgieva for successfully securing a second five-year term as IMF Managing Director, starting October 1, 2024.

    Ms. Georgieva was the sole candidate nominated for the position.

    The Board’s decision followed a series of discussions, including with Ms. Georgieva, in accordance with the selection process established on March 13, 2024.

    In a post on X, President Akufo-Addo noted that Ghana is very delighted about her re-appointment.

    He noted that her role in ensuring global financial stability and development in general, particularly in Emerging Market and Developing Economies (EMDEs) and Low-Income-Countries (LICs), have impacted greatly lives and livelihoods.

    “We have no doubt that she will make an even greater impact in her second term in helping to eradicate poverty, with ample economic opportunities and jobs, especially for LICs.

    “We, in Ghana, recognise her admirable contributions to our nation’s turnaround to restoring macroeconomic stability and economic recovery, from the difficult economic circumstances of the last few years.

    “We expressed our appreciation directly to her during her recent visit to Ghana. On behalf of the Government and people of Ghana, I congratulate Kristalina Georgieva on her well-deserved re-appointment. We wish her well,” he added.

    Ms. Georgieva has been serving as Managing Director of the IMF since October 1, 2019. In this role, she is the head of the IMF’s operational staff and chairs the Executive Board.

    Ms. Georgieva is supported by four Deputy Managing Directors in overseeing the Fund’s operations, which involve approximately 3,100 staff members.

    A Bulgarian national, Ms. Georgieva has held various prominent positions prior to her role at the IMF. She was previously the Chief Executive Officer of the World Bank from January 2017.

    Additionally, she served as the Interim President for the World Bank Group from February 1, 2019, to April 8, 2019. Ms. Georgieva also has a background in the European Commission, where she held roles such as Commissioner for International Cooperation, Humanitarian Aid, and Crisis Response, as well as Vice President for Budget and Human Resources.

    Ms. Georgieva’s academic qualifications include a Ph.D. in Economic Science and a M.A. in Political Economy and Sociology from the University of National and World Economy in Bulgaria. She also taught at the same university from 1977 to 1991.

  • Kristalina Georgieva gets second term as Managing Director of IMF

    Kristalina Georgieva gets second term as Managing Director of IMF

    The International Monetary Fund (IMF) Executive Board has unanimously chosen Kristalina Georgieva to serve a second five-year term as IMF Managing Director, starting October 1, 2024.

    Ms. Georgieva was the sole candidate nominated for the position.

    The Board’s decision followed a series of discussions, including with Ms. Georgieva, in accordance with the selection process established on March 13, 2024.

    After the meeting, the Executive Board Coordinators, Mr. Afonso S. Bevilaqua and Mr. Abdullah F. BinZarah, issued a statement.

    “In taking this decision, the Board commended Ms. Georgieva’s strong and agile leadership during her term, navigating a series of major global shocks. Ms. Georgieva led the IMF’s unprecedented response to these shocks, including the approval of more than $360 billion in new financing since the start of the pandemic for 97 countries, debt service relief to the Fund’s poorest, most vulnerable members, and a historic Special Drawing Rights (SDR) allocation equivalent to $650 billion. Under her leadership, the Fund introduced innovative new financing facilities, including the Resilience and Sustainability Facility and the Food Shock Window. It replenished the Poverty Reduction and Growth Trust, with the capacity to mobilize concessional loans to its poorest members, and co-created the Global Sovereign Debt Roundtable. It also secured a 50 percent quota increase to bolster the Fund’s permanent resources and agreed to add a third Sub-Saharan African chair to the IMF Board.

    “Looking ahead, the Board welcomes Ms. Georgieva’s ongoing emphasis on issues of macroeconomic and financial stability, while also ensuring that the Fund continues to adapt and evolve to meet the needs of its entire membership. It recognizes her focus on strengthening the Fund’s support to its members through effective policy advice, capacity development and financing. The Board looks forward to continuing to work closely with the Managing Director.”

    Ms. Georgieva has been serving as Managing Director of the IMF since October 1, 2019. In this role, she is the head of the IMF’s operational staff and chairs the Executive Board.

    Ms. Georgieva is supported by four Deputy Managing Directors in overseeing the Fund’s operations, which involve approximately 3,100 staff members.

    A Bulgarian national, Ms. Georgieva has held various prominent positions prior to her role at the IMF. She was previously the Chief Executive Officer of the World Bank from January 2017.

    Additionally, she served as the Interim President for the World Bank Group from February 1, 2019, to April 8, 2019. Ms. Georgieva also has a background in the European Commission, where she held roles such as Commissioner for International Cooperation, Humanitarian Aid, and Crisis Response, as well as Vice President for Budget and Human Resources.

    Ms. Georgieva’s academic qualifications include a Ph.D. in Economic Science and a M.A. in Political Economy and Sociology from the University of National and World Economy in Bulgaria. She also taught at the same university from 1977 to 1991.

  • FULL TEXT: Dr. Ernest Addison’s presentation at 2024 ACG Meeting involving IMF Managing Director Kristalina Georgieva

    FULL TEXT: Dr. Ernest Addison’s presentation at 2024 ACG Meeting involving IMF Managing Director Kristalina Georgieva

    I appreciate the opportunity today to speak on behalf of my fellow Governors about “Bolstering Africa’s Financing through the Overlapping Crises and Beyond.”

    Let me first express my heartfelt gratitude to the Managing Director, Madam Kristalina Georgieva, for your excellent leadership, and your strong support for Africa. Madam MD, Africa continues to face complex challenges against the backdrop of successive shocks, manifesting in a subdued post-pandemic recovery, elevated debt distress, and a persistent funding squeeze, that have amplified income divergences and undermined the achievement of sustainable and inclusive growth.

    My colleague Governors, our domestic adjustment policy efforts without adequate financing can only yield limited results, in the context of the complex domestic and external environment.

    As such, stronger support from the development partners, including the IMF, remains paramount. Considering the low catalytic effect of Fund financing, many of our countries view the countercyclical role of Fund financing as indispensable.

    To this end, Madam Managing Director, we highlight the following points for your consideration:

    First, we view continued pragmatism and agility of IMF’s policies to changing global conditions as paramount to better serve its vulnerable members.

    To this end, we underline the necessity for the upcoming comprehensive review of LICs facilities to maintain the PRGT’s concessionality and promote higher access to reverse erosion amplified by the global inflationary episode. We also underscore the criticality of replenishing the CCRT resources envelope to offer grant support to our most vulnerable members in this shock-prone world.

    Considering the expiry of the Food Shock Window amidst a food crisis triggered by the El Nino phenomenon, Fund emergency financing alongside augmentations in program countries would be important to close climate induced financing gaps. In this regard, we call for intensified fundraising efforts under the second phase of the resource mobilization initiatives.

    Second, we call for meaningful collaboration between the IMF and the World Bank to better align their support to LICs. In this regard, we stress the need for coordination of the IMF’s LIC Facilities Review with the World Bank’s IDA21 replenishment efforts to support LICs in a holistic manner.

    Third, we stress the need to keep all financing options on the table, including the use of the Fund’s internal resources. In view of the recent multiple shocks and a crisis like no other, now is the opportune time for a modest gold sale, particularly when gold prices are still favorable.

    Finally, we restate our request for further enhancements to the G20 Common Framework while leveraging the Global Sovereign Debt Roundtable (GSDR) to promote rapid, transparent, and equitable resolution of debt as well as facilitate debt cancellation for the most vulnerable members. The review of the Fund’s internal debt policies is welcome, but we stress the need to ensure that the changes are impactful and achieve their intended purpose.

    Thank you, Chair and Madam Managing Director.

  • IMF anticipates Ghana to achieve close to a 5% growth rate in 2025

    IMF anticipates Ghana to achieve close to a 5% growth rate in 2025

    International Monetary Fund (IMF) has projected robust growth of 4.4% for Ghana in 2025, marking a significant increase from the 2.8% growth projected for 2024.

    This announcement was made during the IMF’s latest April World Economic Outlook at the ongoing spring meetings in Washington DC, highlighting growing optimism about Ghana’s economic trajectory.

    The IMF’s projection positions Ghana ahead of some major African economies in terms of growth rate for 2025, surpassing the World Bank’s projection of 3.3 percent for the same period.

    Despite facing various economic challenges post-COVID-19, including high debt levels, double-digit inflation rates, and currency volatility, Ghana’s economic prospects remain promising according to the IMF.

    This confidence in Ghana’s economy is attributed to the ongoing IMF program aimed at addressing pressing issues for overall economic recovery.

    Signs of a strong recovery have been noted following Ghana’s participation in the IMF program.

    The latest forecast reflects a 1.6 percent increase from the IMF’s 2024 projection of 2.8 percent, closely aligning with the government’s year-end target.

    However, the IMF anticipates a decline of -2.2 percent in Ghana’s current account balance.

    Despite this, the IMF maintains that the overall outlook for Ghana’s economic growth is set for a significant rebound from next year.

  • Bank of Ghana committed to IMF program amid election challenges

    Bank of Ghana committed to IMF program amid election challenges


    The Bank of Ghana reaffirms its dedication to executing a fruitful IMF-supported program, especially amidst an election period, without encountering setbacks.

    Dr. Ernest Addison, the Governor, acknowledged Ghana’s historical challenges in effectively implementing an IMF-ECF program during election years. However, both the government and the central bank are determined to alter this pattern.

    During a joint press conference involving the IMF, the finance ministry, and the BoG on April 13, 2024, Dr. Addison emphasized this commitment.

    “We recognize the importance of continued macroeconomic stability and an early return to the capital markets, and we will remain committed to ensure that programme implementation stays firm.”

    Across Ghana’s history, election years have typically seen elevated spending as political parties vie for electoral success.

    However, this increased expenditure has notably affected the economy, leading to a downturn, particularly following the 2020 general election.

    Meanwhile, Minister of Finance, Dr. Amin Adam, has provided assurance that despite the current election year, the government remains committed to adhering to the International Monetary Fund’s Post-COVID-19 Programme for Economic Growth (PC-PEG) and the World Bank-supported Development Policy Operations.

  • Amin Adam announces energy sector audit and reforms aligning with IMF-supported program

    Amin Adam announces energy sector audit and reforms aligning with IMF-supported program

    Minister of Finance, Dr. Amin Adam, announced that the government will conduct a comprehensive audit of the energy sector, aligning with Ghana’s current IMF-supported program.

    He emphasized the importance of this audit to ensure regulatory compliance and improve the implementation of the cash waterfall mechanism, aimed at minimizing financial shortfalls.

    During a joint press conference involving the IMF, Bank of Ghana, and Finance Ministry on April 13, the finance minister stated that the government will also reassess the tariff-setting methodology of the Public Utilities Regulatory Commission (PURC) to minimize or eliminate discretionary practices.

    He underscored the significance of enhancing transparency in the tariff-setting process and formula.

    “For the energy sector, in particular, we have discussed the possibility of ensuring that the shortfall in the sector is reduced. The reforms we are pursuing as well as new ones will continue to be implemented.

    “We will, for example, conduct a sector-wide audit of the energy sector, strengthen the implementation of the cash waterfall mechanism, review the PURC tariff setting methodology to reduce or eliminate discretion and also to make the formula and the process of tariff setting more transparent,” the finance minister said.

    Regarding the cocoa sector, Dr. Amin Adam mentioned that the government will persist in overseeing COCOBOD’s cost-cutting reforms designed to enhance the sustainability of the cocoa regulator.

    “On the cocoa sector, we will continue to pay attention to the cost-cutting measures being implemented by COCOBOD as well as continue to rationalise the cocoa road sector to make more resources available to complete ongoing road projects,” Dr Amin Adam said.

    The finance minister affirmed the government’s dedication to executing the IMF-ECF program without deviation, even amidst an election year.

    He emphasized that the government’s objective is to reestablish macroeconomic stability and ensure the economy returns to a solid foundation.

  • IMF set to release $360M to Ghana under extended credit facility

    IMF set to release $360M to Ghana under extended credit facility

    Ghana has secured $360 million from the International Monetary Fund (IMF), pending approval by the Fund’s Board.

    This follows the country’s successful negotiation of a Staff-Level agreement for the second review of the extended credit facility.

    An IMF staff team, led by Stéphane Roudet, Mission Chief for Ghana, conducted meetings in Accra from April 2-12. The purpose of these meetings was to assess progress on reforms and discuss the authorities’ policy priorities within the framework of Ghana’s three-year program under the Extended Credit Facility.

    The IMF Executive Board had approved the arrangement for Ghana, totaling $3 billion, on May 17, 2023.

    At the end of the mission, Mr. Roudet who made the announcement said, “This staff-level agreement is subject to IMF Management approval and Executive Board consideration once the necessary financing assurances have been received.

    “An agreement between the Ghanaian authorities and their official creditors on an MoU for a debt treatment in line with program parameters would provide the needed financing assurances.

    “Upon completion of the Executive Board review, Ghana would have access to about $360 million, bringing the total IMF financial support disbursed under the arrangement since May 2023 to about $1,560 million.”

    The Mission Chief for Ghana added “Performance under the IMF-supported program has been generally strong, with most quantitative targets met. Good progress has also been made on the key structural reform milestones.

    “The authorities’ policies and reforms to restore macroeconomic stability and debt sustainability while laying the foundations for stronger and more inclusive growth are already generating positive results.”

    According to Mr Roudet, “Economic activity in 2023 was more robust than initially envisaged, and growth projections for 2024 will be revised upward. Monetary policy has remained appropriately tight, allowing for inflation to decline rapidly.”

    On the fiscal front, he said, “Consistent with the authorities’ commitments under the IMF-supported program, the fiscal primary balance on a commitment basis improved by over 4 percentage points of GDP in 2023 and is on track to achieve a fiscal primary surplus of ½ per cent of GDP in 2024.

    “Spending has remained within budget limits, while the authorities have significantly expanded social protection programs to help mitigate the impact of the crisis on the most vulnerable.

    “Ghana has met its non-oil revenue mobilisation target while making progress in implementing ambitious structural fiscal reforms to bolster domestic revenues, strengthen public financial and debt management, and enhance transparency.

    “The external sector has improved significantly, with international reserve accumulation ahead of program objectives. Financial stability has been preserved, with banks posting solid profits in 2023.

    The Mission Chief for Ghana stated that, “Given Ghana’s strong progress under the IMF-supported program, the next key step for the country is to reach an agreement with its official bilateral creditors on an MoU consistent with the terms agreed in January 2024.

    “We look forward to the authorities’ continued efforts to reach an agreement with all creditors in line with program parameters.”

    During their visit, the IMF staff held meetings with Finance Minister Dr. Amin Adam, Bank of Ghana Governor Dr. Ernest Addison, and their respective teams, as well as representatives from various government agencies. The team also engaged with other stakeholders.

    The IMF staff team expressed gratitude to the Ghanaian authorities and other counterparts for their ongoing open and constructive engagement.

  • Ghana’s IMF bailout program reaches Staff-Level Agreement for second review

    Ghana’s IMF bailout program reaches Staff-Level Agreement for second review

    IMF Mission staff and Ghanaian authorities have successfully reached a staff-level agreement on economic policies and reforms, marking the conclusion of the second review within the three-year ECF-supported program.

    This development signifies that Ghana is poised to access approximately US$360 million in financing once the review is sanctioned by IMF Management and formalized by the IMF Executive Board.

    The IMF, in a statement released on its website, commended Ghana’s robust policy framework, noting that performance under the program has been generally commendable, with significant achievements in meeting quantitative objectives and implementing pivotal reforms.

    The statement highlighted Ghana’s commendable economic strides, citing higher-than-expected economic growth, declining inflation rates, and notable improvements in fiscal and external positions throughout 2023.

    However, the IMF emphasized the importance of timely completion of the second review, stressing the necessity for Ghana and its official bilateral creditors to reach a consensus on a Memorandum of Understanding (MoU) for debt treatment, aligning with the principles established in January 2024.

    Read the full statement from the IMF below and Mission Head Stéphane Roudet:

    An International Monetary Fund (IMF) staff team, led by Mr. Stéphane Roudet, Mission Chief for Ghana, held meetings in Accra during April 2-12, 2024, to discuss progress on reforms and the authorities’ policy priorities in the context of the second review of Ghana’s three-year program under the Extended Credit Facility. The arrangement was approved by the IMF Executive Board for a total amount of SDR 2.242 billion (US$ 3 billion) on May 17, 2023.

    At the end of the mission, Mr. Roudet issued the following statement:

    “I am pleased to announce that IMF staff and the Ghanaian authorities have reached a staff-level agreement on the second 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 once the necessary financing assurances have been received. An agreement between the Ghanaian authorities and their official creditors on an MoU for a debt treatment in line with program parameters, would provide the needed financing assurances. Upon completion of the Executive Board review, Ghana would have access to SDR 269.1 million (about US$ 360 million), bringing the total IMF financial support disbursed under the arrangement since May 2023 to SDR 1,171.9 million (about US$ 1,560 million).

    “Performance under the IMF-supported program has been generally strong, with most quantitative targets met. Good progress has also been made on the key structural reform milestones. The authorities’ policies and reforms to restore macroeconomic stability and debt sustainability while laying the foundations for stronger and more inclusive growth are already generating positive results.

    “Economic activity in 2023 was more robust than initially envisaged, and growth projections for 2024 will be revised upward. Monetary policy has remained appropriately tight, allowing for inflation to decline rapidly.

    “On the fiscal front, consistent with the authorities’ commitments under the IMF-supported program, the fiscal primary balance on a commitment basis improved by over 4 percentage points of GDP in 2023 and is on track to achieve a fiscal primary surplus of ½ percent of GDP in 2024. Spending has remained within budget limits, while the authorities have significantly expanded social protection programs to help mitigate the impact of the crisis on the most vulnerable. Ghana has met its non-oil revenue mobilization target, while making progress in implementing ambitious structural fiscal reforms to bolster domestic revenues, strengthen public financial and debt management, and enhance transparency.

    “The external sector has improved significantly, with international reserve accumulation ahead of program objectives. Financial stability has been preserved, with banks posting solid profits in 2023.

    “Given Ghana’s strong progress under the IMF-supported program, the next key step for the country is to reach an agreement with its official bilateral creditors on an MoU consistent with the terms agreed in January 2024. We look forward to the authorities’ continued efforts to reach an agreement with all creditors in line with program parameters.”

    IMF staff held meetings with Finance Minister Adam, Bank of Ghana Governor Addison, and their teams, as well as representatives from various government agencies. The IMF team also engaged with other stakeholders. The IMF staff team would like to express their gratitude to the Ghanaian authorities and other counterparts for their continued open and constructive engagement.

  • 25.8% inflation rate in March won’t disrupt disinflation trend – Analyst

    25.8% inflation rate in March won’t disrupt disinflation trend – Analyst

    Head of Research at GBC Capital, Courage Boti, has described the recent surge in inflation in March as “not surprising” and assures that it does not pose a significant threat to the ongoing trend of disinflation.

    Data from the Ghana Statistical Services (GSS) indicates that consumer inflation soared to 25.8 percent in March 2024, the highest level since November of the previous year.

    This increase, up from 23.2 percent in February 2024, is attributed largely to base drift effects resulting from a sharp price decline in March 2023.

    Despite the uptick, Mr Boti remains unfazed, stating, “It is an increase but I am not surprised. My expectation was 26 percent. Will this be a trend that continues? Admittedly, there are upside risks to inflation, but from April we should begin to see a return to the path of disinflation. The exchange rate, petroleum price and impending transportation price hikes will serve to moderate the pace of disinflation but we expect that without any significant shocks. The general trend is that there will be a continuous decline in inflation”.

    He anticipates a return to the disinflation path from April onwards, citing factors such as exchange rate stability, petroleum price moderation, and anticipated transportation price adjustments.

    Boti projects that inflation will close the year at under 20 percent, attributing this to factors such as adherence to fiscal discipline under the International Monetary Fund (IMF) program and a potential decrease in liquidity and Treasury bill yields due to recent cash reserve requirements by the Bank of Ghana.

    Government Statistician, Professor Samuel Kobbina Annim, while acknowledging the broad-based nature of the inflation surge, particularly in food prices, emphasizes that the increase cannot solely be attributed to imported food.

    Both food and non-food prices experienced a 2.6 percentage point increase in March, indicating widespread inflationary pressures.

    Market analysts had anticipated the rise in inflation, citing ongoing cedi weakness and recent hikes in ex-pump petroleum prices as contributing factors. Despite this, the month-on-month inflation rate declined from 1.6 percent in February to 0.8 percent in March, suggesting potential easing of underlying inflationary pressures.

    GCB Capital maintains its end-2024 inflation forecast at 16.5 percent ±1 percent, expecting the disinflation trend to resume from April 2024.

    “If you look at the food that is imported, out of the 176 items that recorded price changes higher than 25.8 percent, we had 15.9 percent of the food that is imported relative to food that is local, which constituted 23.3 percent.

    “So one cannot argue that imported food is driving the 29.6 percent that we are seeing in March 2024, because we are equally seeing that local food constituted about 41 of the 176 items that recorded price changes higher than 25.8 percent,” he said.

    “What is coming to us for the first time in a while is a division like health that hitherto we would hardly find it as a division that will record a rate of inflation higher than the overall rate of inflation,” Prof. Annim observed.

    “But we are now seeing health coming up as one of the six divisions that are pointing to the higher rate of inflation.”

    “We, however, flag the simmering cedi depreciation amid immediate liquidity concerns and its potential pass through to ex-pump fuel prices in the wake of the lingering crude oil supply concerns due to geopolitics as an immediate upside risk to inflation through the transport channel and general market prices,” said GCB Capital in its March review of the inflation data.

    “What we need to pay emphasis, what we need to pay attention to is year-on-year and month-on-month inflation moving in different directions as we rightly saw for the second time; we are seeing a dip in month-on-month inflation,” Prof. Annim explained.

    “All this would have implications in the coming months in terms of how the month-on-month inflation would feed into the year-on-year inflation.”

    The data revealed that both food and non-food prices saw a 2.6 percentage point increase in March, suggesting broad-based inflationary pressures. Notably, the health sector emerged as one of the six divisions recording inflation rates higher than the national average.

    However, analysts remain cautious about potential fiscal overruns leading up to the 2024 election, which could pose an upside risk to inflation in the latter part of the year.

  • A ‘lazy man’s approach – IEA Director blasts Ghana’s reliance on IMF, World Bank to fortify the Cedi

    Director of Research at the Institute of Economic Affairs (IEA),Dr. John Kwakye, criticised the government’s heavy reliance on foreign aid to support the local currency during a press briefing at the IEA headquarters.

    He raised concerns about the sustainability of Ghana’s economic strategy, particularly its dependence on funds from institutions like the International Monetary Fund (IMF) and the World Bank, labeling this approach as a “lazy man’s approach.”

    Dr. Kwakye highlighted the risks associated with such borrowing, including Eurobonds and cocoa syndicated loans, and warned of increased pressure on the Ghanaian cedi when these loans come due for repayment.

    Citing statistics from the recent Monetary Policy Committee meeting of the Bank of Ghana (BoG), he noted that the Cedi depreciated by 6.8 percent against the US dollar in the year leading up to March 20, 2024.

    “The Governor admitted that the foreign exchange market came under some pressure, both seasonal and non-seasonal, in February and early March. He reported that in the year to March 20, 2024, the Ghana cedi recorded a depreciation of 6.8 percent against the US dollar. He, however, stated that the cedi “continues to recover its value.” But the question is, by what measure?

    “Certainly, not in nominal terms, because since he spoke on 25th March, the cedi has continued to depreciate, reaching nearly GH¢13 to the dollar. Let us repeat right here that relying on funds from the IMF, World Bank, Eurobonds, cocoa syndicated loans, etc. to bolster the cedi, as we have been doing, is not only a lazy man’s approach. To say the least but also clearly unsustainable, as the pressure would be back on when the loans fall due for repayment.”

    “The way to stabilise the cedi on a durable basis is to increase our FX earnings through greater ownership of, and value addition to, our natural resources, to reduce our import demand through domestic industrialization and to entrench fiscal and monetary discipline,” citinewsroom.com quoted him to have said during the press briefing.

  • IMF staff arrives in Ghana for 2nd review of $3bn economic recovery program

    IMF staff arrives in Ghana for 2nd review of $3bn economic recovery program

    Ghana is under the IMF’s scrutiny as its team commences the second review of the $3 billion economic recovery program post-COVID-19, starting April 2, 2024, following the successful completion of the first review in January.

    Over the next two weeks, the IMF staff will evaluate Ghana’s progress towards program goals, particularly focusing on economic recovery, fiscal management, and reforms.

    The outcome of this review holds significant importance for Ghana’s economy and its relationship with global financial institutions. The government is optimistic about passing the review to unlock the third tranche of IMF funds worth $360 million by June.

    This marks the second review since the program’s inception and the first of two expected this year, with the next review scheduled for November 2024.

    Despite challenges in debt restructuring with creditors, Ghana is making strides, aiming to secure the third tranche of $360 million, adding to the $1.56 billion disbursed so far.

    During their visit, the IMF team will engage with the President, government officials, the Central Bank, and civil society groups. Both the Finance Minister and the Bank of Ghana Governor have affirmed the government’s unwavering commitment to the program.

    The IMF mission will conclude on April 12, 2024, following which the team will return to Washington DC. The report will then undergo review by the IMF Board for approval.

  • IMF staff in Ghana to discuss second review of programme, release of 3rd tranche

    IMF staff in Ghana to discuss second review of programme, release of 3rd tranche

    Ghana is undergoing its second review of the three-year, $3 billion IMF-supported post-COVID-19 Programme for Economic Growth (PC-PEG).

    Starting on Tuesday, April 2, 2024, this review follows the successful completion of the first review in January.

    Over the weekend, IMF mission staff arrived in the country to assess Ghana’s performance against the program’s objectives. This evaluation will last for two weeks.

    During this period, Ghana’s adherence to the prescribed programme objectives will be closely scrutinized, focusing on areas such as economic recovery, fiscal management, and structural reforms.

    The outcome of this review will significantly impact Ghana’s economic trajectory and its relationship with international financial institutions.

    The government has expressed confidence in passing this review, hoping to meet all structural targets to unlock the third tranche of IMF cash of $360 million by the end of June.

    This round of assessment by the IMF is the second programme review after the bailout was finalized, and the first of the two reviews expected this year.

    The next review for 2024 is scheduled for November.

    The IMF team will assess the qualitative and quantitative targets after the second tranche facility was released to the country for budgetary support.

    However, this is happening despite the challenges the government faces in reaching an agreement with its bilateral and commercial creditors for the restructuring of external debts.

    Although the government has made progress in negotiations, it remains optimistic about securing the third tranche of $360 million, bringing the total disbursements to about $1.56 billion so far.

    During the visit, the IMF will meet with the President, government and Central Bank officials, and civil society organizations, among others.

    Finance Minister Dr. Mohammed Amin Adam and Bank of Ghana Governor Dr. Ernest Addison have both assured that the government is prepared to stay the course.

    The IMF mission staff will conclude on Friday, April 12, 2024, after which they will return to Washington DC with their status report subject to the approval of the IMF Board.

  • Release of $360m dependent on success of second review by IMF – Dr Mohammed Amin

    Release of $360m dependent on success of second review by IMF – Dr Mohammed Amin

    Finance Minister-designate, Dr Mohammed Amin Adam, has noted that the approval of the 2nd Review by the IMF Executive Board, expected in June 2024, would lead to the release of the third tranche of US$360 million.

    Ghana received $600 million from the Fund in the first and second tranches respectively. This would bring the total disbursements under the programme to US$1.56 billion.

    According to him, the next two reviews of Ghana’s US$3bn International Monetary Fund (IMF)-supported Post Covid-19 Programme for Economic Growth (PC-PEG) will take place in the second and fourth quarters of the year.

    “The 3rd Review has been programmed for November 2024,” he added.

    While engaging the press today, the minister-designate reported substantial strides in meeting the objectives set out IMF programme.

    “The Ministry of Finance is working with the BoG in preparation for the IMF 2nd Review Mission. Preliminary assessment undertaken by MoF and BoG shows that we are on course to meet most of the targets under the Programme.”

    This comes after the successful completion of the first review of the IMF programme on January 19, 2024.

    “During the 2nd Review, the IMF mission will engage the authorities in technical and policy discussions to enable them to assess Ghana’s performance on programme objectives, the 6 Quantitative Performance Criteria (QPCs), the 3 Indicative Targets (ITs), 1 Monetary Policy Consultation Clause (MPCC), and the Structural Benchmarks (SBs) with respect to end Dec 2023 targets. They will also review performance towards upcoming QPCs, ITs, and SBs,” he added.

  • “We are on course to meet most of the targets under IMF programme” – Mohammed Amin

    “We are on course to meet most of the targets under IMF programme” – Mohammed Amin

    Finance Minister-designate, Dr. Mohammed Amin Adam, has reported substantial strides in meeting the objectives set out in the 3-year, US$3bn International Monetary Fund (IMF)-supported Post Covid-19 Programme for Economic Growth (PC-PEG).

    The ministerial appointee made this known on Tuesday while engaging the press.

    “The Ministry of Finance is working with the BoG in preparation for the IMF 2nd Review Mission. Preliminary assessment undertaken by MoF and BoG shows that we are on course to meet most of the targets under the Programme.”

    Dr. Amin Adam also highlighted that the Ministry is working closely with the Bank of Ghana (BoG) to ready for the International Monetary Fund’s (IMF) second review mission, slated for April 2 to 12.

    This comes after the successful completion of the first review of the IMF programme on January 19, 2024.

    “During the 2nd Review, the IMF mission will engage the authorities in technical and policy discussions to enable them to assess Ghana’s performance on programme objectives, the 6 Quantitative Performance Criteria (QPCs), the 3 Indicative Targets (ITs), 1 Monetary Policy Consultation Clause (MPCC), and the Structural Benchmarks (SBs) with respect to end Dec 2023 targets. They will also review performance towards upcoming QPCs, ITs, and SBs,” he added.

    The minister-designate emphasized that the approval of the 2nd Review by the IMF Executive Board, expected in June 2024, would lead to the release of the 3rd tranche of US$360 million. This would bring the total disbursements under the programme to US$1.56 billion.

    “The 2nd Review will be the first of the two semi-annual reviews programmed for 2024. The 3rd Review has been programmed for Nov 2024,” he added.