Tag: IMF

  • Ghana has successfully met its revenue mobilization target – IMF

    Ghana has successfully met its revenue mobilization target – IMF

    The International Monetary Fund (IMF) has lauded Ghana’s successful attainment of all targets outlined for the $3 billion three-year extended credit facility.

    In a statement released on Friday, January 19, 2024, the IMF emphasized, “Ghana’s performance under the program has been strong,” highlighting the fulfillment of quantitative performance criteria and nearly all indicative targets and structural benchmarks during the first review.

    The IMF acknowledged the positive outcomes of the authorities’ reform efforts, noting emerging signs of economic stabilization.

    The growth in 2023 was resilient, inflation declined, and both fiscal and external positions improved.

    Additionally, the IMF disclosed that Ghana is progressing to “lower the fiscal primary deficit on a commitment basis by about 4 percentage points of GDP in 2023.” The government’s adherence to spending limits throughout the program was also noted.

    To address the crisis’s impact on vulnerable populations, the Ghanaian authorities expanded social protection programs significantly. In terms of revenue, Ghana achieved its non-oil revenue mobilization target.

    The statement highlighted the country’s advancements in debt restructuring, including the completion of domestic debt restructuring.

    On January 12, 2024, an agreement was reached with the Official Creditor Committee (OCC) under the G20’s Common Framework, aligning with Fund program parameters. This agreement facilitated the necessary financing assurances for the completion of the Executive Board review.

    The IMF’s positive remarks followed the approval of the second tranche of the bailout program, providing Ghana with an immediate disbursement of $600 million, constituting the second part of the $3 billion extended facility.

    Below is the full press statement from the IMF

    IMF Executive Board Concludes 2023 Article IV Consultation with Ghana and Completes First Review under the Extended Credit Facility Arrangement

    The Executive Board of the International Monetary Fund (IMF) completed today the First review of the $3 billion, 36-month Extended Credit Facility (ECF) Arrangement, which was approved by the Board on May, 17, 2023 , as well as the 2023 Article IV Consultation with Ghana. The completion of the first ECF review allows for an immediate disbursement of SDR 451.4 million (about US$600 million), bringing Ghana’s total disbursements under the arrangement to about US$1.2 billion.

    Ghana’s economic performance has been marked by significant volatility over the years. Episodes of strong growth and overall macroeconomic stability were undermined by rising inflation, exchange rate depreciation, and loss of external buffers, in turn largely reflecting overly accommodative fiscal policies. Most recently, severe external shocks compounded pre-existing fiscal and debt vulnerabilities, exacerbating such volatility and leading to acute economic and financial pressures in 2022.

    The authorities’ reform program has been designed to respond to immediate pressures and pave the way for a more resilient and prosperous economy. The ECF arrangement has provided a framework to implement the authorities’ policy and reform strategy to restore macroeconomic stability and debt sustainability, address long standing vulnerabilities, and lay the foundations for higher and more inclusive growth.

    Ghana’s performance under the program has been strong. All quantitative performance criteria for the first review and almost all indicative targets and structural benchmarks were met.

    Consistent with the authorities’ commitments under the Fund-supported program, Ghana is on track to lower the fiscal primary deficit on a commitment basis by about 4 percentage points of GDP in 2023. Spending has remained within program limits. To help mitigate the impact of the crisis on the most vulnerable population, the authorities have significantly expanded social protection programs. On the revenue side, Ghana has met its non-oil revenue mobilization target.

    The Ghanaian authorities are also making good progress on their debt restructuring strategy. Their domestic debt restructuring was completed over the summer. On January 12, 2024, the authorities reached an agreement with the Official Creditor Committee (OCC) under the G20’s Common Framework on a debt treatment that is in line with Fund program parameters. This agreement provided the financing assurances necessary for the Executive Board review to be completed.

    Ambitious structural fiscal reforms are bolstering domestic revenues, improving spending efficiency, strengthening public financial and debt management, preserving financial sector stability, enhancing governance and transparency, and helping create an environment more conducive to private sector investment.

    The authorities’ reform efforts are bearing fruit, and signs of economic stabilization are emerging. Growth in 2023 has proven resilient, inflation has declined, and the fiscal and external positions have improved.

    Looking ahead, fully and durably restoring macroeconomic stability and debt sustainability and fostering a sustainable increase in economic growth and poverty reduction will require steadfast policy and reform implementation.

    At the conclusion of the Executive Board’s discussion, Mr. Bo Li, Deputy Managing Director and Acting Chair, issued the following statement:

    “Ghana’s economic performance has been marked by significant volatility over the years. Most recently, severe external shocks compounded pre existing fiscal and debt vulnerabilities, leading to acute economic and financial pressures in 2022. The authorities’ efforts to reorient macroeconomic policies, restructure debt, and initiate wide ranging reforms are already generating positive results, with growth more resilient than initially envisaged, inflation declining, the fiscal and external positions improving, and international reserves increasing.

    “Fully and durably restoring macroeconomic stability and debt sustainability and fostering higher and more inclusive growth require steadfast policy and reform implementation. The government’s plans to further reduce deficits by mobilizing additional domestic revenue and streamlining expenditure and to finalize its comprehensive debt restructuring are critical to underpin debt sustainability and ease financing constraints. Continued efforts to protect the vulnerable and to create space for higher social and development spending are also key. Reforms to improve tax administration, strengthen expenditure control and management of arrears, enhance fiscal rules and institutions, and improve SOEs management are needed to ensure lasting adjustment.

    “The authorities took decisive steps to rein in inflation and rebuild foreign reserve buffers. Maintaining an appropriately tight monetary stance and enhancing exchange rate flexibility are key to achieving the program’s objectives.

    “Bank of Ghana had deployed its regulatory and supervisory tools to mitigate the impact of the domestic debt restructuring on financial institutions. The authorities’ strategy aimed at maintaining a sound financial sector, drawing on new resources from the private sector, government, and multilaterals to rapidly rebuild financial buffers, is welcome. Ensuring full implementation of bank recapitalization plans and addressing legacy issues in the financial sector will be important.

    “Reforms to create an environment more conducive to private investment are needed to enhance the economy’s potential and underpin sustainable job creation. Given Ghana’s exposure to climate shocks, promoting a green recovery by further advancing the adaptation and mitigation agendas should also remain a priority.”

  • Ghana has met its non-oil revenue mobilization target – IMF

    Ghana has met its non-oil revenue mobilization target – IMF

    The International Monetary Fund (IMF) has praised Ghana for successfully meeting all targets set for the $3 billion three-year extended credit facility.

    In a statement released on January 19, 2024, the IMF acknowledged Ghana’s strong performance, with all quantitative performance criteria for the first review met, along with almost all indicative targets and structural benchmarks.

    The IMF noted positive outcomes such as economic stabilization, resilient growth in 2023, a decline in inflation, and improved fiscal and external positions.

    “The authorities’ reform efforts are bearing fruit, and signs of economic stabilization are emerging. Growth in 2023 has proven resilient, inflation has declined, and the fiscal and external positions have improved.”

    Ghana is on track to reduce the fiscal primary deficit by about 4 percentage points of GDP in 2023, according to the IMF.

    The government’s adherence to spending limits and efforts to expand social protection programs were also commended.

    “To help mitigate the impact of the crisis on the most vulnerable population, the authorities have significantly expanded social protection programmes. On the revenue side, Ghana has met its non-oil revenue mobilization target.”

    “The Ghanaian authorities are also making good progress on their debt restructuring strategy. Their domestic debt restructuring was completed over the summer. On January 12, 2024, the authorities reached an agreement with the Official Creditor Committee (OCC) under the G20’s Common Framework on a debt treatment that is in line with Fund program parameters. This agreement provided the financing assurances necessary for the Executive Board review to be completed.”

    Additionally, Ghana has made progress in its debt restructuring strategy, completing domestic debt restructuring and reaching an agreement with the Official Creditor Committee under the G20’s Common Framework.

    The IMF’s remarks followed the approval of the second tranche of the $3 billion extended facility, providing Ghana with $600 million immediately.

    Below is the full press statement from the IMF

    IMF Executive Board Concludes 2023 Article IV Consultation with Ghana and Completes First Review under the Extended Credit Facility Arrangement

    The Executive Board of the International Monetary Fund (IMF) completed today the First review of the $3 billion, 36-month Extended Credit Facility (ECF) Arrangement, which was approved by the Board on May, 17, 2023 , as well as the 2023 Article IV Consultation with Ghana. The completion of the first ECF review allows for an immediate disbursement of SDR 451.4 million (about US$600 million), bringing Ghana’s total disbursements under the arrangement to about US$1.2 billion.

    Ghana’s economic performance has been marked by significant volatility over the years. Episodes of strong growth and overall macroeconomic stability were undermined by rising inflation, exchange rate depreciation, and loss of external buffers, in turn largely reflecting overly accommodative fiscal policies. Most recently, severe external shocks compounded pre-existing fiscal and debt vulnerabilities, exacerbating such volatility and leading to acute economic and financial pressures in 2022.

    The authorities’ reform program has been designed to respond to immediate pressures and pave the way for a more resilient and prosperous economy. The ECF arrangement has provided a framework to implement the authorities’ policy and reform strategy to restore macroeconomic stability and debt sustainability, address long standing vulnerabilities, and lay the foundations for higher and more inclusive growth.

    Ghana’s performance under the program has been strong. All quantitative performance criteria for the first review and almost all indicative targets and structural benchmarks were met.

    Consistent with the authorities’ commitments under the Fund-supported program, Ghana is on track to lower the fiscal primary deficit on a commitment basis by about 4 percentage points of GDP in 2023. Spending has remained within program limits. To help mitigate the impact of the crisis on the most vulnerable population, the authorities have significantly expanded social protection programs. On the revenue side, Ghana has met its non-oil revenue mobilization target.

    The Ghanaian authorities are also making good progress on their debt restructuring strategy. Their domestic debt restructuring was completed over the summer. On January 12, 2024, the authorities reached an agreement with the Official Creditor Committee (OCC) under the G20’s Common Framework on a debt treatment that is in line with Fund program parameters. This agreement provided the financing assurances necessary for the Executive Board review to be completed.

    Ambitious structural fiscal reforms are bolstering domestic revenues, improving spending efficiency, strengthening public financial and debt management, preserving financial sector stability, enhancing governance and transparency, and helping create an environment more conducive to private sector investment.

    The authorities’ reform efforts are bearing fruit, and signs of economic stabilization are emerging. Growth in 2023 has proven resilient, inflation has declined, and the fiscal and external positions have improved.

    Looking ahead, fully and durably restoring macroeconomic stability and debt sustainability and fostering a sustainable increase in economic growth and poverty reduction will require steadfast policy and reform implementation.

    At the conclusion of the Executive Board’s discussion, Mr. Bo Li, Deputy Managing Director and Acting Chair, issued the following statement:

    “Ghana’s economic performance has been marked by significant volatility over the years. Most recently, severe external shocks compounded pre existing fiscal and debt vulnerabilities, leading to acute economic and financial pressures in 2022. The authorities’ efforts to reorient macroeconomic policies, restructure debt, and initiate wide ranging reforms are already generating positive results, with growth more resilient than initially envisaged, inflation declining, the fiscal and external positions improving, and international reserves increasing.

    “Fully and durably restoring macroeconomic stability and debt sustainability and fostering higher and more inclusive growth require steadfast policy and reform implementation. The government’s plans to further reduce deficits by mobilizing additional domestic revenue and streamlining expenditure and to finalize its comprehensive debt restructuring are critical to underpin debt sustainability and ease financing constraints. Continued efforts to protect the vulnerable and to create space for higher social and development spending are also key. Reforms to improve tax administration, strengthen expenditure control and management of arrears, enhance fiscal rules and institutions, and improve SOEs management are needed to ensure lasting adjustment.

    “The authorities took decisive steps to rein in inflation and rebuild foreign reserve buffers. Maintaining an appropriately tight monetary stance and enhancing exchange rate flexibility are key to achieving the program’s objectives.

    “Bank of Ghana had deployed its regulatory and supervisory tools to mitigate the impact of the domestic debt restructuring on financial institutions. The authorities’ strategy aimed at maintaining a sound financial sector, drawing on new resources from the private sector, government, and multilaterals to rapidly rebuild financial buffers, is welcome. Ensuring full implementation of bank recapitalization plans and addressing legacy issues in the financial sector will be important.

    “Reforms to create an environment more conducive to private investment are needed to enhance the economy’s potential and underpin sustainable job creation. Given Ghana’s exposure to climate shocks, promoting a green recovery by further advancing the adaptation and mitigation agendas should also remain a priority.”

  • IMF endorses first review of programme with Ghana, set to release $600m

    IMF endorses first review of programme with Ghana, set to release $600m

    The Finance Ministry has disclosed that Ghana is poised to receive the second tranche of $600 million from the International Monetary Fund (IMF) in the near future.

    Finance Minister Ken Ofori-Atta stated that the IMF has granted approval for all necessary financing assurances from Ghana’s Official Creditors.

    The minister clarified that the IMF board’s endorsement of the initial review of Ghana’s loan programme would facilitate the prompt disbursement of approximately $600 million as part of its $3 billion bailout programme.

    “It is with great honour that I can announce to you that earlier today, the International Monetary Fund endorsed the first review of our programme. This is a resounding affirmation that the programme is advancing steadily and our reform trajectory remains steadfast”.

    “Consequently, the endorsement has unlocked a $600 million disbursement from the IMF and will pave the way for an additional $300 million disbursement from the World Bank under the development policy operation financing,” he said.

    Mr Ken Ofori-Atta, addressed a joint press conference with the IMF, the Finance Ministry, and the Bank of Ghana on January 19, 2024, where he shared updates on Ghana’s financial situation.

    In addition, Mr Ofori-Atta is scheduled to meet with the World Bank on Tuesday, January 23, to engage in discussions regarding the possibility of securing an additional $250 million. This funding is intended to further support and boost the country’s economy.

    “The World Bank will meet on Tuesday, January 23. In addition, we expect the World Bank to approve $250 million to support the Ghana Financial Stability Fund. These resources, in total $1.15 billion, will significantly booster our economic recovery effort,” he added.

    In 2023, Ghana encountered a delay in receiving the second tranche of the $3 billion bailout package from the International Monetary Fund (IMF) due to ongoing debt rework negotiations with external creditors. The country had set a November 1 deadline in line with the IMF program, but negotiations hampered the timeline.

    Ghana was actively engaged in talks with external creditors, seeking debt relief totaling $10.5 billion. Proposals had been submitted to commercial creditors, aiming for a potential haircut of up to 40%. Additionally, negotiations for additional debt restructuring were underway with bilateral creditors, including China and the Paris Club.

  • IMF green lights the immediate release of second tranche of 600 million dollars to Ghana

    IMF green lights the immediate release of second tranche of 600 million dollars to Ghana

    International Monetary Fund (IMF) has granted approval for Ghana to receive the second tranche of $600 million.

    This announcement was made in a statement on Friday, January 19, 2024, following Ghana’s successful negotiation with bilateral lenders, including China and France, the previous week. This crucial step paved the way for the release of the second disbursement.

    Ghana’s achievement of passing its first review under the Fund program, initiated with the initial tranche in May of the preceding year, underscores the country’s commitment to meeting program targets. The government has outlined plans to allocate the newly acquired funds to support activities outlined in the 2024 budget.

    The details of this development were shared during a joint press conference on Friday, January 19, 2024, involving representatives from the government, the IMF, and the Bank of Ghana.

    In addition to securing the IMF funds, Ghana has successfully negotiated a moratorium with official creditors, extending debt payments until May 2026. The country anticipates finalising an agreement with Eurobond investors to restructure a $13 billion debt by the end of March.

    Finance Minister Ken Ofori-Atta has announced a structured approach to bilateral obligations, with payments totaling $5.4 billion scheduled over two installments spanning 16 and 17 years. This move aligns with the optimistic outlook expressed by the Finance Minister regarding IMF funding, anchored in financial assurance under the G20 Common Framework.

    In parallel, the World Bank has signaled its readiness to provide Ghana with $300 million in budgetary support to aid the country’s economic recovery. The release of this financial support is pending the convening of the World Bank’s Board of Executive Directors next week, following the agreement in principle by the Official Creditors’ Committee on the key criteria for Ghana’s planned debt restructuring.

    Below is the full press statement from the IMF

    IMF Executive Board Concludes 2023 Article IV Consultation with Ghana and Completes First Review under the Extended Credit Facility Arrangement

    The Executive Board of the International Monetary Fund (IMF) completed today the first review of the $3 billion, 36-month Extended Credit Facility (ECF) Arrangement, which was approved by the Board on May 17, 2023 , as well as the 2023 Article IV Consultation with Ghana. The completion of the first ECF review allows for an immediate disbursement of SDR 451.4 million (about US$600 million), bringing Ghana’s total disbursements under the arrangement to about US$1.2 billion.

    Ghana’s economic performance has been marked by significant volatility over the years. Episodes of strong growth and overall macroeconomic stability were undermined by rising inflation, exchange rate depreciation, and the loss of external buffers, in turn largely reflecting overly accommodative fiscal policies. Most recently, severe external shocks compounded pre-existing fiscal and debt vulnerabilities, exacerbating such volatility and leading to acute economic and financial pressures in 2022.

    The authorities’ reform program has been designed to respond to immediate pressures and pave the way for a more resilient and prosperous economy. The ECF arrangement has provided a framework to implement the authorities’ policy and reform strategy to restore macroeconomic stability and debt sustainability, address long-standing vulnerabilities, and lay the foundations for higher and more inclusive growth.

    Ghana’s performance under the program has been strong. All quantitative performance criteria for the first review and almost all indicative targets and structural benchmarks were met.

    Consistent with the authorities’ commitments under the Fund-supported program, Ghana is on track to lower the fiscal primary deficit on a commitment basis by about 4 percentage points of GDP in 2023. Spending has remained within program limits. To help mitigate the impact of the crisis on the most vulnerable population, the authorities have significantly expanded social protection programs. On the revenue side, Ghana has met its non-oil revenue mobilization target.

    The Ghanaian authorities are also making good progress on their debt restructuring strategy. Their domestic debt restructuring was completed over the summer. On January 12, 2024, the authorities reached an agreement with the Official Creditor Committee (OCC) under the G20’s Common Framework on a debt treatment that is in line with Fund program parameters. This agreement provided the financing assurances necessary for the Executive Board review to be completed.

    Ambitious structural fiscal reforms are bolstering domestic revenues, improving spending efficiency, strengthening public financial and debt management, preserving financial sector stability, enhancing governance and transparency, and helping create an environment more conducive to private sector investment.

    The authorities’ reform efforts are bearing fruit, and signs of economic stabilization are emerging. Growth in 2023 has proven resilient, inflation has declined, and the fiscal and external positions have improved.

    Looking ahead, fully and durably restoring macroeconomic stability and debt sustainability and fostering a sustainable increase in economic growth and poverty reduction will require steadfast policy and reform implementation.

    At the conclusion of the Executive Board’s discussion, Mr. Bo Li, Deputy Managing Director and Acting Chair, issued the following statement:

    “Ghana’s economic performance has been marked by significant volatility over the years. Most recently, severe external shocks compounded pre existing fiscal and debt vulnerabilities, leading to acute economic and financial pressures in 2022. The authorities’ efforts to reorient macroeconomic policies, restructure debt, and initiate wide ranging reforms are already generating positive results, with growth more resilient than initially envisaged, inflation declining, the fiscal and external positions improving, and international reserves increasing.

    “Fully and durably restoring macroeconomic stability and debt sustainability and fostering higher and more inclusive growth require steadfast policy and reform implementation. The government’s plans to further reduce deficits by mobilizing additional domestic revenue and streamlining expenditure and to finalize its comprehensive debt restructuring are critical to underpin debt sustainability and ease financing constraints. Continued efforts to protect the vulnerable and to create space for higher social and development spending are also key. Reforms to improve tax administration, strengthen expenditure control and management of arrears, enhance fiscal rules and institutions, and improve SOEs management are needed to ensure lasting adjustment.

    “The authorities took decisive steps to rein in inflation and rebuild foreign reserve buffers. Maintaining an appropriately tight monetary stance and enhancing exchange rate flexibility are key to achieving the program’s objectives.

    “Bank of Ghana had deployed its regulatory and supervisory tools to mitigate the impact of the domestic debt restructuring on financial institutions. The authorities’ strategy aimed at maintaining a sound financial sector, drawing on new resources from the private sector, government, and multilaterals to rapidly rebuild financial buffers, is welcome. Ensuring full implementation of bank recapitalization plans and addressing legacy issues in the financial sector will be important.

    “Reforms to create an environment more conducive to private investment are needed to enhance the economy’s potential and underpin sustainable job creation. Given Ghana’s exposure to climate shocks, promoting a green recovery by further advancing the adaptation and mitigation agendas should also remain a priority.”

  • World Bank praises key progress in Ghana’s Debt Restructuring talks

    World Bank praises key progress in Ghana’s Debt Restructuring talks

    World Bank Group has commended the Official Creditors’ Committee under the G20 Common Framework for reaching an agreement in principle on the fundamental terms of the proposed debt restructuring for Ghana.

    In a released statement, the World Bank noted that the agreement, aligning with the Joint World Bank-International Monetary Fund Debt Sustainability Framework, marks a significant milestone in the journey towards re-establishing debt sustainability in Ghana.

    “This agreement will help unlock financial support by international financial institutions, including a $300 million budget support operation supported by IDA, which will be considered by the World Bank’s Board of Executive Directors next week.

    This will help Ghana in its recovery, attracting investments and restoring a sustainable growth path,” said Ousmane Diagana, World Bank Vice President for Western and Central Africa.

    The Resilient Recovery Development Policy Operation constitutes the initial phase of a comprehensive series of three operations, amounting to $900 million. This initiative is a crucial aspect of the broader World Bank commitment to assist Ghana in crisis response and enhance resilience.

    Ghana is set to actualize $4.3 billion in commitments from the World Bank, channeling these funds into national and regional projects aimed at fostering private sector development, job creation, inclusive service delivery, and sustainable resilient development.

  • Invest IMF fund into productive activities not consumption – ISSER tells govt 

    Invest IMF fund into productive activities not consumption – ISSER tells govt 

    Director of the Institute of Statistical, Social, and Economic Research (ISSER), Professor Peter Quartey, has emphasized the significance of strategically investing funds obtained from the International Monetary Fund (IMF) into productive sectors.

    During an interview on JoyNews’ PM Express, Prof Quartey emphasized that the funds received from the IMF should not be considered as “free money.” Instead, he stressed the importance of directing investments towards sectors that would spur economic growth and generate sustainable income.

    Prof. Quartey underscored the importance of steering clear from using the resources for consumptive purposes, as such an approach could impede the country’s capacity to fulfill repayment obligations in the future.

    The Director emphasized that top priority should be accorded to infrastructure development, specifically highlighting the significance of investing in roads. These road investments should focus on facilitating the efficient transportation of goods from production areas to consumption centers and ports for export.

    He argued that well-maintained roads would not only reduce travel time but also enhance productivity, particularly in key production areas like Kumasi.

    Prof Quartey advocated for diversifying the use of funds into areas such as agricultural support, credit, and agricultural insurance.

    He also mentioned the significance of adding value to production and supporting initiatives like “Planting for Food and Jobs 2.0.”

    However, he stressed the importance of ensuring that these funds are allocated judiciously to the right individuals and sectors that contribute positively to the country’s Gross Domestic Product (GDP).

    “Some of the funds can go into that but we should make sure that they go into the right areas and be dispersed to the right kind of people who will produce and add to our GDP. And also add value to whatever we produce,” he said on Thursday.

  • You are toasting in Davos about IMF program, but where is the party in Ghana? – Bright Simons quizzes govt

    You are toasting in Davos about IMF program, but where is the party in Ghana? – Bright Simons quizzes govt

    Vice President of think-thank IMANI Centre for Policy and Education, Bright Simons, has questioned government over its celebration of an International Monetary Fund (IMF) agreement when the consequences will be damning on the ordinary citizen.

    Mr Simons expressed concern following what he describes as “feel-good story” by the Finance Ministry and a report by Blomberg on Ghana’s debt restructure situation.

    A portion of a recent Bloomberg report that spoke of a moratorium won by Ghana with official creditors on debt payments read “Ghana’s pact, finalized in just over a year, has been hailed as one of the quickest under the Group-of-20 Common Framework for Debt Treatment.”

    In an opinionated article, he noted that while the Finance Minister continues to laud himself outside the shores of the country, in Ghana, Mr Ofori-Atta’s resignation has become topical again.

    “Ghana’s Finance Ministry has been on a roll lately. Hardly a day goes by without them releasing another feel-good story about the country’s protracted debt restructuring effort or its three-year IMF program, now in its eighth month. The latest is this big Davos splash by Bloomberg.

    At home, people seem to have tuned off. The trending Finance Ministry story is a ruling party grandee expressing the age-old hope in his circles that the Finance Minister will resign soon to lift the party’s image among the public, and, obviously, his party’s chances in the upcoming general elections (December 7th, 2024),” he wrote.

    Mr Simons believes there is a disparity between international engagements and the tangible positive effects or celebrations within Ghana.

    Shedding more light on this assertion, Mr Simons explained that “The IMF is desperate to hoist Ghana as evidence of the effectiveness of its treatments. The “international system” needs some success stories for development multilateralism, to vindicate programs like the Common Framework, which Ghana initially rejected (just as it earlier, flatly, refused to enter another IMF program) before jumping on board; Western powers, whose favour Ghana has curried more aggressively of late, need Ghana to preserve its “West African oasis” narrative; and global investors exposed to Ghana, such as Eurobond holders, are keen to see the value of their assets recover.”

    “At home, on the other hand, the citizenry demands more than a “turnaround” story. Those abreast with the technical details are much too aware of the spin. Whilst the ordinary masses simply can’t square these jamborees about “moratoriums” and “IMF Board reviews” with their daily reality of a high cost of living, corruption scandals, and a clear turn for the worse on the basic infrastructure front,” he added.

    In a tweet in reaction to his views on the matter, he asked Ghanaians in which part of the country will they be celebrating the IMF and debt restructuring initiatives which is to help save the dying economy.

    “Ghana people, government heavyweights are being toasted in Davos for all the great news about the IMF program being churned out. And much lip-smacking is happening on account of another $600m tranche due. But at home, where the party at?” he quizzed.

    President Akufo-Addo together with Minister for Foreign Affairs, Shirley Ayorkor Botchway; Minister for Finance, Ken Ofori-Atta; along with officials from the Foreign Ministry and the Presidency is in Davos for the 2024 World Economic Forum Annual Meetings scheduled from Tuesday, January 16, to Friday, January 19.

  • IMF’s second tranche of $600M will serve as budget support – Finance Minister

    IMF’s second tranche of $600M will serve as budget support – Finance Minister

    Finance Minister Ken Ofori-Atta has announced that the anticipated $600 million second tranche of the International Monetary Fund (IMF) bailout package, expected next week, will be allocated for specific programs outlined in the 2024 Budget.

    The IMF’s Executive Board is scheduled to convene on January 19, 2024, in Washington DC, USA, to conduct Ghana’s first review under the Fund program.

    Upon approval by the board, the $600 million is set to be disbursed to Ghana within the following three working days. Mr Ofori-Atta emphasized that Ghana has fulfilled all the necessary requirements to secure the funding.

    “We are very optimistic that Ghana will pass this review when the Executive Board of the IMF meets on January 19, 2024”, he expressed hope in an engagement with Joy Business.

    The initially scheduled meeting for Friday, January 19, 2024, faced postponements due to challenges in Ghana securing necessary “financing assurance” from bilateral creditors via the official creditor committee on debt restructuring.

    The board had rescheduled the meeting multiple times since November 2023, and it was eventually moved from January 18 to January 19, 2024. This adjustment allowed the board three working days to review documents submitted by the IMF staff.

    Despite the earlier hurdles, the board proceeded with the meeting after Ghana reached an agreement with bilateral creditors on restructuring approximately $5.4 billion in debts. The board is expected to release a staff report detailing Ghana’s program status and government performance over the past month.

    Finance Minister Ofori-Atta is optimistic that the “possible disbursement” of funds will unlock additional support from Ghana’s donors.

    The World Bank Board is set to convene on January 25, 2024, to approve the disbursement of around $550 million. Of this, $300 million will be allocated to various projects in the budget, while $250 million will contribute to the Ghana Stability Fund, supporting institutions affected by the Domestic Debt Exchange Programme.

    By the end of January 2024, Ghana anticipates securing over $1.1 billion from the IMF and World Bank to bolster its economy.

  • Why is Ghana’s feel-good IMF story not vibing at home? – Bright Simons

    Why is Ghana’s feel-good IMF story not vibing at home? – Bright Simons

    Ghana’s Finance Ministry has been on a roll lately. Hardly a day goes by without them releasing another feel-good story about the country’s protracted debt restructuring effort or its three-year IMF program, now in its eighth month.

    The latest is this big Davos splash by Bloomberg:

    At home, people seem to have tuned off. The trending Finance Ministry story is a ruling party grandee expressing the age-old hope in his circles that the Finance Minister will resign soon to lift the party’s image among the public, and, obviously, his party’s chances in the upcoming general elections (December 7th, 2024).

    Ghana’s international goodwill is still understandably strong

    It is not too difficult understanding this gap in sentiments between home and abroad. Ghanaian governments, especially the current one, tend to worry more about national image overseas than at home. Most international stakeholders share the government’s compulsive need for a good story. 

    The IMF is desperate to hoist Ghana as evidence of the effectiveness of its treatments. The “international system” needs some success stories for development multilateralism, to vindicate programs like the Common Framework, which Ghana initially rejected (just as it earlier, flatly, refused to enter another IMF program) before jumping on board; Western powers, whose favour Ghana has curried more aggressively of late, need Ghana to preserve its “West African oasis” narrative; and global investors exposed to Ghana, such as Eurobond holders, are keen to see the value of their assets recover.

    Citizens are bored stiff of the talk

    At home, on the other hand, the citizenry demands more than a “turnaround” story. Those abreast with the technical details are much too aware of the spin. Whilst the ordinary masses simply can’t square these jamborees about “moratoriums” and “IMF Board reviews” with their daily reality of a high cost of living, corruption scandals, and a clear turn for the worse on the basic infrastructure front.

    Just about the time the Finance Ministry’s spin was winding through Davos, operators of Ghana’s under-pressure “public” transport system, composed (like much of Africa) of private mini-buses and saloons, announced an imminent rise in fares by 30%. The electricity utility in the populous urban south of the country (ECG) is about to add Value Added Tax (VAT) to bills, effectively hiking tariffs by up to 22%, depending on how the increasingly complicated VAT computation works out for a consumer (a small segment of the urban population consuming less than about $4 per month are exempted). Whilst inflation is falling, prices are still rising by more than 23% per annum. A sluggish rebound in growth has not fed through into the incomes of the vast majority of citizens, who ply various trades in the large informal economy. 

    Then, there are the scandals. 

    Just before 2023 closed out, word came that the government is dramatically expanding an opaque contract signed with a mushroom firm set up by a timber merchant in 2019 to audit tax compliance among distributors and marketers of refined fuel products, like gasoline and diesel. The company, SML, was entitled to receive 0.05 local currency units (5 GHP) for every litre of fuel sold. In 2019, that amounted to about $4 million a month. 

    The expansion of the contract in 2023 to cover the upstream petroleum and minerals sector now meant it would be entitled to 0.75% of all the country’s mineral proceeds and $0.75 for each barrel of oil exported by Ghana. The mind-boggling arrangement implies earnings for the company of nearly a billion dollars over the contract term under various reasonable scenarios. Not only was this contract awarded non-competitively to a company with zero track record in such a highly sensitive and technically complex domain as revenue assurance, but it has now come to light that the company’s interventions duplicate other revenue assurance programs set up at a considerable cost to the country. Worse, the evidence shows that no tax evasion whatsoever is being blocked by this upstart entity.

    Growing disappointment

    Taking all these together, the coolness at home towards the Finance Ministry’s efforts to ramp up enthusiasm becomes self-explanatory, but there is a need to return to the earlier point about why those technically abreast with the IMF and debt restructuring processes are also increasingly disinterested. Doing that requires a bit of a recap. 

    Repeating an earlier point, the Ghanaian government was totally opposed to an IMF program just two years ago. The political opposition and some elites strongly championed a return to the IMF. Within that group were some who felt that an IMF program will massively rein in certain conduct long blamed for the country’s economic woes. Some of us felt obliged to counsel caution by pointing to persistent governance lapses despite successive IMF programs (this being Ghana’s 17th program).

    Eight months after the IMF program commenced, disappointment is growing. Much of the ennui stems from the arcaneness, opaqueness and seeming arbitrariness in the whole setup of IMF crisis resolution, as well as its accompanying macroeconomic reforms and debt management framework.

    At the domestic level, it is not just that schemes like the SML deal continue to proliferate under the ostensible supervision of the Fund, it is also that spin often overtakes any serious reckoning with the facts of reform, seemingly with the IMF’s blessings. 

    Take the recent announcements about a major deal with bilateral creditors, for instance. 

    The recent announcement is the foundation of an upcoming meeting of the IMF’s board in two days during which Ghana’s performance so far will be reviewed, and the next $600 million tranche released. 

    Yet, everyone knows that the supposed “progress” is illusory and the facts of progress concerning the broader program do not relate seriously to the benchmarks in Ghana’s IMF program in terms of actual macroeconomic impact. Let us dive into the weeds.

    When one compares the above Ghanaian announcement with the Zambian version issued in the middle of last year, some subtle differences emerge.

    In simple terms, by the time the Zambian announcement was made, an actual “agreement in principle” was in place with bilateral creditors. So, Zambia could explain clearly what exactly was on offer. The resulting IMF “endorsing statement” echoed these details by mentioning the baseline and contingent elements agreed upon.

    Nothing like that could be found in the Ghanaian case.

    Why? 

    True, much of this is about ritual display. As we now know from the Zambian episode, the announcement was far from a conclusive agreement reached among creditors. However, in the case of Zambia, there was at least a holistic set of terms that had been agreed upon in principle and based on which macroeconomic projections could be made as part of, at least, a rigorous attempt at reviewing the pace of the IMF bailout program. In Ghana’s case, what existed was a draft term sheet. 

    Anticipating some of the pitfalls in the Zambian negotiations, the government of Ghana and the IMF had decided that a board review must be based on open-ended commitments rather than definite economic projections awaiting legal drafting. Considering that even after the MOU is signed, bilateral agreements are required with each creditor country, there is nothing conclusive about the current milestone. The “assurances” represented by the draft term sheet do not fundamentally change any calculus regarding the bilateral component of Ghana’s external debt. 

    The real issue in this whole dance would be the comparability of treatment analysis, through which the rich countries and China will ensure that private creditors, such as Eurobond investors, do not get a far nicer deal than they secure. Based on recent developments, it is safe to say that scaling that hurdle is the only one that matters as far as the official creditor committee process in the Common Framework is concerned. 

    Debt Relief is the real deal

    At any rate, as everyone knows, Ghana’s bilateral debt constitutes just 4.2% of the total external debt stock. Servicing this small fraction of the country’s total debt is negligible. In fact, following the country’s default, external debt servicing has now fallen to ~5.4% of the total debt service burden, down from 12.3% in the pre-crisis period (looking at interest payments alone, the domestic component was 93.5% of the total between January and August).

    And, as is evident from the charts above and below, the bilateral debt service burden was about 5% of 4% of the quarterly external debt service burden or roughly 0.2% of the total quarterly public debt service in Q2 2024. For rigour’s sake, we must acknowledge the historical practice of Ghana, like so many other African countries, piling up bilateral debt payment arrears, which probably explains why the IMF’s estimate of bilateral debt service for 2022 amounted to 20% of total external debt service (separately, the IMF is also more stringent in accounting for amortisation costs, a very important factor, for instance, in the case of Ghana’s China debt).

    No reader can miss the serious dominance of domestic debt in all these calculations. Even in the second quarter of 2023, after the government announced the end of what it claimed was a highly successful domestic debt restructuring exercise, the domestic debt service burden was still 50% higher than a year ago (when, in relative terms, it constituted 81% of total debt service).

    In typical fashion, most public macroeconomic statistics are now between 3 and 6 months behind schedule, but it is still possible to piece together a somewhat concerning picture.

    In September 2023, total domestic debt stock stood at about $20 billion. The effective cost of local debt is climbing towards 25%, due to the government’s switch to the short end of the domestic debt market after being shut out of the international capital markets. And notwithstanding the coupon rate haircuts suffered by holders of restructured bonds. Meanwhile, annual domestic debt service, including amortisation, can be extrapolated at over 130 billion GHS presently (with cocoa bills alone racking up 15 billion GHS of this amount in 2023), in line with IMF projections. The focus on interest payments alone (about 25 billion GHS in 2023) in the budget could be falsely reassuring.

    Clearly, in absolute terms, the debt servicing pressure has not truly abated, even though domestic debt restructuring is estimated to have shaved off about 60 billion GHS in 2023. In nominal terms, domestic debt service is effectively climbing higher at a faster rate today than it did in the pre-crisis period, after adjusting for the effect of the one-off restructuring episode. This is why even after a string of domestic debt treatments, the country is still refusing to pay holders of some domestic bonds, such as the old series of the benighted cocoa bills.

    In these circumstances, the only real relief one can expect from even a successful conclusion later this year of negotiations to restructure the Eurobond debt, easily 75% of the total external debt service burden had Ghana not defaulted, is a continuance of the current lowering of pressure on the exchange rate. A welcome development for the country’s economic managers, but not the absolute game-changer some assume it is.

    Honestly speaking, the bilateral debt relief does not even register in the actual budgetary scheme of things.

    It bears emphasising that from a pure relief point of view, Ghana’s current situation is the most relieving: most obligations have simply been frozen. Any Eurobond deal, for instance, that does not result in a substantial moratorium will lead to an uptick in external debt service. Hence, the only real incentive for a government with just eleven months left in government to persist with the tough Eurobond negotiations towards a definite conclusion is the linkage to IMF disbursements.

    This is why looseness in how progress is measured in triggering disbursements constitutes complicity of the IMF in efforts to keep postponing the real macroeconomic reckoning that Ghana must face.

    When loose draft term sheets are branded as definitive, the ever-essential comparability of treatment tango is pushed farther away, into the future. Disbursements are consequently made based on illusory progress. Future governments are saddled with the fallout. But without the fat, juicy, carrots of bailout disbursements. If the current government realises its ambition of collecting 80% of the total IMF bailout package and continues to be successful in skirting around the tougher reforms, the next government will almost certainly relapse on key aspects of the program. How serious is this threat to the country’s near future?

    We can start by looking at the key quantitative performance criteria in the IMF program. 

    Net International Reserves

    Under the terms of the IMF program, Ghana’s Net International Reserves (a measure of foreign exchange held by the central bank) should have increased by at least $270 million in September of 2023, then a further increase by $655 million by December of the same year, and by March 2024, the net cumulative increase should have hit $107 million. 

    As usual, the public data of the Bank of Ghana is four months old so analysts can only draw inferences from projections based on the trend. From $6.25 billion at the end of December 2022, Ghana’s Gross International Reserves dropped to $5.15 billion in October 2023. By the end of the year, it was hovering a little above $4.7 billion. However, the government then came up with a nifty trick. It ramped up purchases of gold on the domestic market, so that even though reserves excluding pledged petroleum funds and other encumbered reserves, would have fallen to less than $1.5 billion by the end of 2023, and, when netted against current government forex liabilities, would have breached the program floor, the government is now happily announcing gross reserves (excluding pledged funds) of $2.5 billion, up from the $2.1 billion it reported in August 2023. 

    Given these acrobatics, the government does not need to cite the failure of expected funds from the World Bank and the IMF (which would not have counted towards the floor calculation anyway) as an excuse.

    The thing though is that none of these acrobatics matter very much to Ghana’s ongoing inability to meet critical forex-denominated liabilities. It has defaulted on its Africa Trade Insurance Agency obligations, has resorted to pawn-shop arrangements to stave off action by independent power producers, to whom it owes more than $2 billion, and is trying to grab money belonging to the national oil company to sustain its candidacy to host the Afreximbank-promoted Africa Energy Bank. The irony is that the national oil company (GNPC) itself has become a persistent defaulter of its obligations. In fact, the street wisdom in Accra nowadays is that unless you have something to threaten the government in a pretty strong way, forget about getting paid.

    Non-accumulation of external debt arrears

    Under the IMF agreement, the government is to flat-out halt the fresh accumulation of external debt payment arrears (obviously excluding the Eurobond and export credit payments which the IMF advised the government to default on, as it is doing now in Ethiopia). 

    Since this measure is on a commitment basis, it is unclear how exactly the government has been winging it, given that the Ghanaian parliament has continued to approve various new foreign-financed commitments. Arrears continue to pile up on effectively restructured obligations arising from the infrastructure financing boom that attracted the likes of Commerzbank, Deutsche Bank and a raft of other European banks to Ghana in the very recent past.

    Newly Contracted Collateralised Loans & Guarantees

    On this scorecard measure, independent analysts are heavily constrained in their ability to track the government’s compliance due to the complete opacity of many arrangements. Since the reports the government shares with the IMF are not available to even the people’s representatives in Parliament, analysts have to rely on deep insider sources to keep abreast of developments. Moreover, even though the brackets in the IMF program related to this indicator are quite broad, capturing most of the key state-owned enterprises and public agencies, considerable room still exists for lax interpretation. 

    For example, the political opposition accused the government of sponsoring GNPC to pursue debt deals with Russian energy companies like Lukoil and was met with an aloof silence. Eventually, the government promised to bring the loan to Parliament. The country continues to pursue a $3.2 billion facility through Thelo DB of South Africa to revamp the western rail corridor even though it is clear that no tranche can be released without sovereign guarantees. Delays and operational challenges with the Indian EXIM – Afcons Infrastructure rail project mean that arrears on a commitment basis are already mounting. 

    It is hard to see how exactly the IMF and the government justify all the many such arrangements underway given the plain wording of the terms of the agreement. 

    Some targets have been met. 

    The program’s inflation target (central rate) for end-December 2023 was 29.4%. The rate recorded for the period was 23.2%. 

    The primary fiscal balance (cumulative floor) target, a measure highly sensitive to debt servicing, and which is the key fiscal anchor for the whole IMF deal, was set in the program document for December 2023 at 4.6 billion Ghana Cedis (cf. the comparative annual figures at end-2021 was 8.8 billion and 4.8 billion in 2022). By August 2023, the overall fiscal deficit had declined to 3% of GDP (compared to an annual figure of 3.6% of GDP for 2022), significantly better than the 4.6% target. The corresponding primary balance was a deficit of 0.7% (versus the -0.9% target). The provisional figures for December 2023 are a 0.5% primary balance and an overall 6% budget deficit (against the government’s projected 5.3% deficit). 

    The central bank’s zero financing of central government pledge also appears to be holding, except for a curious 3.85 billion GHS payment with a missing footnote in the public accounts. The picture is further complicated by the Gold for Oil program, where transactional losses could be interpreted as implicit financing of the state-owned fuel trading companies participating in the scheme.

    The non-oil revenue floor of 116 billion GHS by end-December was met when after some back and forth, the Ghana Revenue Authority (GRA) demonstrated that the target of 122 billion GHS was more or less hit.

    Deft handling of the political economy of the crisis

    Credit must also go to the government for its skilled management of the IMF relationship and the strategic alignment with certain large countries with outsized influence on the IMF Board. The Ghanaian president’s consistent re-echoing of the western hemisphere’s talking points is unlikely to have been missed in Washington.

    Shifting the pain

    Above all else, though, it is the masterful shifting of as much pain as possible from the central government to diffused private interests that has done the most to contrive the current semblance of normalcy in Accra. 

    Unlike the previous government, the government has refused to accept some of the key hallmarks of austerity as part of the ongoing IMF program. At least, nothing that could reduce its patronage power. There has been no public sector hiring freeze or ceiling on wage increments. The Ministry of National Security, for instance, spent nearly 24% more on employees in 2023 than originally budgeted (at a time when the government intends to increase the VAT burden on consumers by 133% in 2024). Even more egregious is the case of the Ministry of Local Government, which saw its initial 2023 compensation budget revised upwards by nearly 100%. In the event, despite disbursement hiccups, it ended up spending 44% more than the original budget.

    As deals like SML and planned expansions to the scope of government contracts with favoured Information Technology (IT) companies, like the operator of the vaunted Ghana Card, show, the government is not averse to spending hundreds of millions of dollars on politically beloved contractors, however dubious the merits.

    Favouritism?

    In previous commentary, this author has pointed out that the scorecard of this IMF program has been watered down, in comparison with previous programs, to downplay the criticality of structural reforms to any lasting recovery from the crisis. 

    The discrepancy between a strong, early, focus on such matters as public procurement, tax exemptions, auditing enhancements, and the like in some of Ghana’s previous programs, and in the programs of some of Ghana’s peers (like Zambia and Mozambique), on the one hand, and the relatively narrower emphasis on certain macroeconomic targets in the country’s current program, on the other hand, can raise charges of favouritism.

    In respect of structural benchmarks, Zambia’s first review was stacked with eleven highly consequential reforms including a full legislative review of public procurement and wide-ranging public financial management shifts.

    In comparison, Ghana’s seven structural benchmarks do not go as deep.

    A charge of favouritism would, however, not amount to breaking any new ground. The IMF, like any tutor, is allowed to have teacher’s pets. Researchers like Princeton’s Grigore Pop-Eleches have long examined how such a situation might arise. After conducting a detailed examination of the issue of IMF favouritism in a 2009 survey of Latin American and East European programs, he concluded that the ideal of “technocratic impartiality” is routinely trumped by more powerful geopolitical and systemic factors.

    He said, “[T]he Fund’s deviations from technocratic impartiality are no longer limited to severe crises as the Fund’s main shareholders have greater leeway to use IMF resources for narrower economic or political objectives.”

    Ahead of Friday’s meeting of the IMF Board, some of Professor Pop-Eleches’ findings readily come to mind.

    But his caution not to overegg the geopolitical dimension of the IMF’s crisis intervention is also important. In the end, there are operational reasons why an institution like the IMF would like to keep programs compact and super-focused, especially in the first year. After years of over-promising, some humility on the part of the IMF regarding how far its ability to change state conduct can go without resurrecting the old bogeys of neo-colonialist conditionality and imperialist paternalism is perhaps warranted. 

    The perils of short-term focus

    It is of course not only the IMF that is narrowly incentivised in this matter, commercial creditors at home and abroad are too. It is in their interest for momentum to build behind the narrative of recovery as this directly affects the recovery rate they can hope to see when Ghana eventually exits the default. Even if, as some creditors do acknowledge, the post-exchange performance of the bonds they hold will be shaped by the credibility of Ghana’s new promises to pay when due. 

    Right now, too large a portion of the good narrative is a bit circular. Defaulting on debt will certainly improve the primary balance, for instance, which can help with central bank financing, and thus inflation, currency depreciation, and so on. At least, in the short term.

    But cutting the budget deficit by failing to release committed funds is contingent on its real effects. For example, in 2023, the Ghana Audit Service decided not to audit Ghana’s overseas diplomatic missions. That is surely savings made (though one can speculate what that means for Public Financial Management (PFM) compliance down the line in the Foreign Ministry). Conversely, having local banks discount interim payment certificates for contractors and using the phantom fiscal space created to initiate more projects does not amount to savings. It is just kicking the can down the road. Or to the next government.

    In a similar vein, powering ahead with a large number of new hospitals using declining oil revenue (even as current ones struggle under a tottering national health insurance scheme) that will require fresh budgetary commitments for operationalisation down the line, can be reconciled with freezing capex in the health budget. But only until the equipment bills for the brand new facilities come due. 

    In short

    The IMF, Davos attendants at the receiving end of the Finance Ministry’s charm, and external creditors, all of whom can and will exit the Ghana story at various points in the years ahead, can be allowed some joy in light of the modest successes chalked under Ghana’s IMF program so far, and because of the impending IMF disbursements and bilateral creditor MOUs. 

    Citizens and domestic observers, on the other hand, have to be more real and less impressionable.

    DISCLAIMER: Independentghana.com will not be liable for any inaccuracies contained in this article. The views expressed in the article are solely those of the author’s, and do not reflect those of The Independent Ghana

  • Ofori-Atta hints at another engagement with bondholders

    Ofori-Atta hints at another engagement with bondholders

    Ghana’s Finance Minister, Ken Ofori-Atta, announced on Monday the country’s plans to resume discussions with its international bondholders starting next week.

    This move comes in the wake of a recent successful deal to restructure $5.4 billion of official creditor debt, as Ghana aims to further enhance its financial position.

    Ghana, with approximately $13 billion in outstanding Eurobonds, plans to pursue ongoing discussions with bondholders following a meeting held in Marrakech in October.

    Finance Minister Ken Ofori-Atta revealed this intention during an interview at the World Economic Forum (WEF) annual meeting.

    Additionally, officials are scheduled to visit China on January 23, according to Ofori-Atta. The co-chairing responsibilities of Ghana’s Official Creditor Committee by China and France played a pivotal role in the agreement, unlocking further funding from a $3 billion International Monetary Fund (IMF) rescue loan.

    Ghana defaulted on most of its overseas debt in December 2022 after debt servicing costs soared. It is looking to restructure $20 billion of external debt, which totaled about $30 billion at the end of 2022, and has already restructured most local debt.

    Restructuring negotiations last year were a “very difficult, painful process,” but Ghana has “built pretty good momentum”, Ofori-Atta said.

    The IMF board is due to meet on Friday to decide on a $600 million disbursement from Ghana’s bailout program. Getting approval is usually seen as a formality once a meeting has been scheduled and would unlock funding from other multilateral lenders.

    The World Bank was expected to decide on $550 million of “sorely needed” funding on Jan. 25, Ofori-Atta added.

    Ghana is reworking its debts under the Common Framework, a restructuring process set up by the G20 countries during the COVID-19 pandemic that has been criticized for slow results.

    Ofori-Atta said the 2022 macroeconomic situation had been “cage rattling”, but was improving, and he pointed to a rise in revenue and a decline in inflation.

    The latest data showed consumer inflation had slowed to 23.2% year-on-year in December compared to the more than 50% when the country tipped into default.

    Meanwhile growth was running at 3%, more than twice the IMF’s projected rate of 1.2%, Ofori-Atta said.

  • Ghana’s economy gradually recovering – IMF boss

    Ghana’s economy gradually recovering – IMF boss


    The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, has lauded the positive outcomes emerging from Ghana’s economic policies under the IMF-supported program.

    In a recent post on X (formerly Twitter), she expressed not only her contentment but also emphasized the significance of the policy and reform commitments outlined in Ghana’s agreement with the IMF, asserting that they are crafted in the best interest of the Ghanaian populace.

    President Akufo-Addo and Ghana’s Finance Minister, Ken Ofori-Atta, were commended for their commitment during the World Economic Forum (#WEF24).

    “Wonderful to see President Nana Addo Dankwa Akufo-Addo and Ghana’s Finance Minister, Ken Ofori-Atta at #WEF24. The policy and reform commitments under Ghana’s economic program are starting to bear fruit,” She posted.


    Georgieva’s statement indicated that the economic program’s policy and reform commitments are beginning to bear fruit, signaling progress and positive shifts.

    Furthermore, she extended appreciation for the debt treatment agreement between Ghana and the Official Creditor Committee, describing it as consistent with the objectives of the IMF-supported program.

    The Managing Director reiterated that the program aims to achieve macroeconomic stability, ensure debt sustainability, build resilience, and lay the foundations for stronger and more inclusive growth.

    In a detailed statement, Georgieva specifically thanked the Official Creditor Committee, with special mention to the co-chairs, China and France, for their dedicated efforts in reaching the debt treatment agreement.

    She highlighted this agreement as a substantial milestone for the G20 Common Framework, wherein G20 creditors collaborated to provide debt relief for Ghana.

    The Managing Director’s comprehensive remarks underscored the intricate yet crucial steps being taken to support Ghana’s economic trajectory and promote resilience and growth.

  • Protracted tightening of policy rate projected until inflation firmly settles

    Protracted tightening of policy rate projected until inflation firmly settles

    In response to escalating geopolitical tensions impacting oil prices and a year-end consumer inflation rate of 23.2 percent, the Bank of Ghana Monetary Policy Committee (MPC) is poised to maintain its ‘tighter-for-longer’ policy stance until inflation is securely anchored. 

    This strategic move reflects the central bank’s commitment to navigating economic uncertainties and fostering stability in the face of external pressures.

    In the year 2023, consumer inflation witnessed a significant decline, registering a notable drop from 30.4 percent to close the year at 23.2 percent. 

    This surpassed both the government’s target of 31.3 percent and the IMF‘s central forecast of 29.4 percent. 

    Despite this positive trend, inflation persists at elevated levels when compared to the medium-term target of 8±2 percent.

    The most recent projections from the central bank signal an ongoing disinflationary process, backed by a resilient monetary policy, a stable exchange rate, and the effects of base drift. 

    The central bank underscores its dedication to vigilance in closely monitoring potential risks that could impact the ongoing disinflation process.

    Addressing recent occurrences since the last committee meeting, increased tensions in the Middle East and disruptions in the Suez Canal present additional challenges. According to a Reuters report, air and sea strikes by the United States and Britain on Houthi targets in Yemen led to a 3 percent surge in oil prices. 

    The Suez Canal, responsible for approximately 12 percent of global trade, has already experienced weeks of disruptions, causing a 1.3 percent decline in global trade from November to December 2023 and impacting businesses worldwide.

    Brent crude futures were up US$2.21, or 2.9 percent, at US$79.62 a barrel at 13.50 GMT; while U.S. West Texas Intermediate crude futures climbed US$2.13, or 3 percent, to US$74.15.

    The main transmission conduits for these global uncertainties will be through energy prices, exchange rates, inflation and interest rates, especially if the Middle East conflict expands to involve Iran.

    Gita Gopinath, First Managing Director-IMF, warns central banks about the potential challenges in addressing inflation trajectories, especially in the face of financial stresses. She emphasises the need for vigilance and preparedness in navigating the complex economic landscape, considering the possibility of a stagflationary environment.

    “If inflation proves to be stubborn or escalates due to unforeseen shocks, it may necessitate higher interest rates for an extended period – or even lead to rate increases. This could result in a situation where there is an inflation problem while simultaneously experiencing a significant slowdown in economic growth. Such a scenario is known as a stagflationary environment, and it should not be dismissed as a possibility. Therefore, there is a need for vigilance and preparedness in addressing potential challenges in this complex economic landscape,” she said.

  • Ken Ofori-Atta doesn’t appreciate the economy he is managing – Prof Gatsi

    Ken Ofori-Atta doesn’t appreciate the economy he is managing – Prof Gatsi

    Dean of the University of Cape Coast Business School (UCCBS), Professor John Gatsi, has cast doubt on Finance Minister Ken Ofori-Atta’s understanding of the economy he manages.

    This revelation follows the Finance Minister’s recent statement asserting that the decline in inflation figures indicates Ghana’s economic recovery.

    During an interview on the Morning Starr with Francis Abban, Professor Gatsi highlighted that the root causes of the economic challenges in the country remain unaddressed.

    He questioned the Finance Minister’s optimism, stating, “The Finance Minister, when he was presenting his economic indicators, will want to compare it to about 10 years ago, about 15 years ago. Why are we turning the corner just because we are comparing inflation figures, which are not responsive to policy rate and not responsive to the cost of doing business in the country?”

    Professor Gatsi emphasized that key issues such as corruption, unemployment, and a high cost of doing business persist, with no significant improvements.

    He expressed skepticism about attributing the supposed economic turnaround solely to declining inflation figures, which he argued do not reflect the challenges faced by businesses and the actual policy effectiveness.

    He concluded by remarking, “Our problem is corruption, unemployment, and people selling jobs at the government departments, which people are saying all around. So I wonder how somebody will just look at the inflation figures and then say that we have turned the corner. It means that person doesn’t appreciate the economy he is managing.”

  • Review trade rules – BoG urged

    Review trade rules – BoG urged

    Chief Executive Officer (CEO) of FBNBank, Victor Yaw Asante, has urged the Bank of Ghana (BoG) to undertake a comprehensive review of certain trade and documentation regulations. 

    As the financial sector continues to evolve rapidly, Mr Asante emphasized the need for these rules to be adapted to stay relevant in the dynamic financial landscape.

    Identifying particular regulations requiring reconsideration, he specifically pointed to the trade threshold. 

    He stressed that certain rules, including this one, were established many years ago and should be recalibrated to align with present-day demands and trends.

    “With the trade threshold, for example, you can’t transfer more than US$50,000 without full documentation and so on. Things have changed. I think the central bank has squeezed us a little bit. What it needs to do is to re-examine the rules around trade and trade documentation, because it is becoming a big issue. Some of the rules were set many years ago and we think it is time for the threshold to be re-examined, and that will be key,” he suggested.

    Victor Yaw Asante

    He made these remarks in response to a question from B&FT about the reforms he envisions for the sector in 2024, during the bank’s annual health workshop in Accra.

    He additionally pointed out that alterations to the primary reserve rules, allowing a banking institution to hold primary reserve in the currency it possesses, carry implications for the sector.

    Mr. Asante noted that while the central bank is implementing some strategies to put people in check, those same changes are forcing others to try things outside the banking system.

    “The central bank is doing very well to try and put a firm grip on how people misbehave, but sometimes in doing that people are also driven underground. So, rather, people try to do things outside the banking system, and that is not what we want,” he added.

    While calling for reforms, he commended the BoG – regulator of the financial sector – for the good work done so far and the constant dialogue with regulated institutions, adding that: “We will continue working with the central bank and other relevant bodies to have a better 2024”.

    Additionally, he stated that despite challenges faced by the financial sector in 2023 it remains largely sound – with most banks recording growth.

    “For starters, government has done a pretty good job of managing the challenges, although other issues are still pending. I think the big one was to try and get the IMF emergency facility. Once those things were managed, it meant that the macros became slightly more predictable; and therefore, we were able to return to normal business,” he explained.

    Mr. Asante concluded that the sector’s prospects for 2024 are better than in the previous year: “I expect to see a return to growth for most businesses in 2024, and banks in particular – a bit more confidence in our ability to lend and support our customers”.

    Away from the central bank, Mr. Asante advocated a paradigm-shift in the economy’s structure, emphasising the importance of prioritising domestic production over imports. This, he explained, is very key to strengthening the cedi and creating job opportunities for the country’s youth.

  • AI expected to cause 40% reduction in global employment – IMF projects

    AI expected to cause 40% reduction in global employment – IMF projects

    The International Monetary Fund (IMF) has forecasted a significant transformation in the global job market caused by Artificial Intelligence (AI). 

    IMF is foreseeing a 40% reduction in employment worldwide due to the rapid advancement of AI.

    As technology continues to evolve at an unprecedented pace, the IMF’s latest report sheds light on the potential impact of AI on various industries and occupations, raising concerns about the future of work for millions around the world.

    The IMF underscores that the integration of AI technologies into diverse sectors, ranging from manufacturing to service industries, is poised to bring about substantial changes in labor dynamics. 

    Almost 40.0% of global employment is exposed to Artificial Intelligence, the International Monetary Fund has stated in its new analysis.

    Historically, it said, automation and information technology have tended to affect routine tasks, but one of the things that sets AI apart is its ability to impact high-skilled jobs.

    As a result, advanced economies face greater risks from AI—but also more opportunities to leverage its benefits—compared with emerging market and developing economies.

    In advanced economies, about 60% of jobs may be impacted by AI. Roughly half the exposed jobs may benefit from AI integration, enhancing productivity.

    For the other half, AI applications may execute key tasks currently performed by humans, which could lower labor demand, leading to lower wages and reduced hiring. In the most extreme cases, some of these jobs may disappear.

    In emerging markets and low-income countries, by contrast, AI exposure is expected to be 40 percent and 26 percent, respectively. These findings suggest emerging markets and developing economies face fewer immediate disruptions from AI.

    At the same time, the report said, many of these countries don’t have the infrastructure or skilled workforces to harness the benefits of AI, raising the risk that over time the technology could worsen inequality among nations.

  • 40% of employees to lose their jobs to AI – IMF

    40% of employees to lose their jobs to AI – IMF

    The International Monetary Fund (IMF) has reported that almost 40.0% of global employment is exposed to Artificial Intelligence (AI), according to its recent analysis.

    Unlike previous technological shifts, AI has the potential to impact high-skilled jobs as well. The IMF notes that advanced economies face both greater risks and opportunities from AI compared to emerging market and developing economies.

    In advanced economies, around 60% of jobs may be impacted by AI, with roughly half benefiting from its integration to enhance productivity.

    The other half, however, may see lower labor demand, leading to reduced wages and hiring.

    In contrast, emerging markets and low-income countries have lower immediate disruptions from AI, but they may lack the infrastructure and skilled workforces to harness its benefits, potentially exacerbating global inequality over time.

  • Ghana finalises deal with creditors on debt resolution—Reports

    Ghana finalises deal with creditors on debt resolution—Reports

    Ghana has successfully concluded negotiations with the Paris Club on debt treatment, clearing the path for the International Monetary Fund (IMF) to disburse the upcoming tranche of $600 million to Ghana.

    An insider familiar with the talks revealed to Graphic Business that the approval and disbursement of this tranche would also activate an additional $500 million in support from the World Bank, aimed at providing economic relief for Ghana.

    The Ministry of Finance is expected to issue an official statement confirming these developments. This agreement with Ghana’s official creditors sets the stage for the IMF Executive Board to greenlight the release of $600 million as part of its $3 billion bailout program.

    Additional details reported by Reuters reveal that discussions surrounding the “cut-off date,” indicating the point beyond which new loans with bilateral creditors won’t undergo restructuring, recently became a point of contention in the negotiations.

    Bilateral lenders, including China and France, which co-chair the Official Creditor Committee (OCC), hold approximately 25% of Ghana’s $20 billion external debt slated for restructuring.

    There were divergent views among creditors, with some favouring December 31, 2022, as the cut-off date, considering Ghana’s default earlier that month.

    Others advocated for March 24, 2020, the initiation of the Group of 20’s debt service suspension initiative (DSSI), designed to aid the world’s poorest nations amid the challenges posed by the COVID crisis. Ghana didn’t participate in the DSSI.

    No immediate responses were received from China’s central bank, finance ministry, and the Export-Import Bank of China to Reuters’ requests for comment.

    Formal acceptance of the proposal by Ghana is still pending.

    As per one source, the OCC plan envisions no reduction in principal or interest rates overall. However, Ghana is expected to abstain from payments for the next four years, with regular payments resuming thereafter.

    After their meeting on Monday, official creditors reportedly shared the term sheet of their proposal with Ghana, as per media reports and insider sources.

    Speaking about a possible deal with official creditors, Finance Minister Ken Ofori-Atta told Bloomberg he hoped to finish reviewing the draft term sheet by Friday and that “in terms of the broad framework, all parties are in agreement,” which he said would allow the IMF to sign off on the disbursement.

  • IMF/World Bank to give Ghana $1.15 billion by by end of February 2024 – Report

    IMF/World Bank to give Ghana $1.15 billion by by end of February 2024 – Report

    Ghana is poised to secure approximately $1.15 billion in funding from the International Monetary Fund (IMF) and the World Bank by the end of February.

    This development coincides with ongoing negotiations among bilateral creditors to finalise the country’s debt restructuring terms.

    The Minister of Finance expressed confidence in reaching a memorandum of understanding with official creditors during a meeting scheduled for January 8.

    Ghana awaits an agreement with bilateral creditors, which is crucial for the IMF executive board to assess Ghana’s performance under the PC-PEG program.

    The IMF program, initiated in May with the approval of the first $600 million tranche, anticipates the arrival of the second tranche from the $3 billion bailout.

    Despite delays, the board is expected to convene on January 18, with the second tranche likely reaching Ghana’s account after initial expectations for the end of 2023.

    “A board approval will also “trigger” the process for two World Bank disbursements totaling $550 million, said Ofori-Atta. The Bank has committed $300 million in budgetary support and another $250 million towards Ghana’s Financial Stability Fund, so “we are in good shape,” Bloomberg said.

  • Ghana holds top spot for highest interest rates in Africa – Latest report

    Ghana holds top spot for highest interest rates in Africa – Latest report

    Ghana has maintained the top position for the highest interest rates in Africa over the last two years.

    Despite a decline in rates after receiving the first tranche of the IMF loan and completing the debt exchange program, recent reports indicate that rates for the 91-day and 182-day Treasury bills remain relatively high at about 29.24% and 31.88%, respectively.

    Even with decreases of 6.12% and 4.10% in yields for the 91-day and 182-day bills in 2023, current interest rates hover around 32%, placing Ghana at the forefront of African countries with the highest rates.

    Egypt closely follows as the second-highest, with rates of 25.68% for the 91-day bill and 25.95% for the 182-day bill.

    Meanwhile, Cape Verde and the Seychelles have recorded the lowest interest rates in Africa.

  • Ghana’s official creditors to meet on January 8 to discuss debt restructuring terms of US$5.4 billion loan

    Ghana’s official creditors to meet on January 8 to discuss debt restructuring terms of US$5.4 billion loan


    Ghana’s official creditors are scheduled to convene on Monday, January 8, to deliberate on the restructuring of approximately $5.4 billion in loans to the country, according to Reuters.

    This meeting holds significant importance for Ghana’s ability to secure its next tranche of funding from the International Monetary Fund (IMF).

    The Official Creditor Committee (OCC), co-chaired by the governments of the People’s Republic of China and France, will be central to these discussions. Collectively, these two countries, among other bilateral lenders, account for about 25% of Ghana’s $20 billion external debt slated for restructuring.

    The Reuters report suggests that the meeting will primarily focus on reaching a consensus regarding a ‘cut-off date.’ This date is pivotal in determining when new loans from bilateral creditors will no longer be subject to restructuring.

    The definition of this date has become a key challenge in Ghana’s debt restructuring efforts.

    The report indicates that the external creditors are divided on the exact cut-off date. One group advocates for December 31, 2022, as the cut-off date, citing Ghana’s default earlier in that month.

    Conversely, another group pushes for March 24, 2020, the date when the Group of 20 introduced the debt service suspension initiative (DSSI) to assist the world’s poorest countries during the COVID-19 crisis.

    The divergence of opinions on the cut-off date underscores the complexities involved in Ghana’s debt rework and highlights the challenges in reaching a unified approach among the country’s official creditors.

    The outcome of this meeting will not only impact Ghana’s debt restructuring process but will also have broader implications for its financial standing and international support from institutions like the IMF.

    “Ghana is still about cut-off date, but creditors haven’t agreed yet,” a source from Reuters said. “If the cut-off date is agreed upon, that means an agreement on debt restructuring is close.”

    In preparation for the OCC meeting on January 8, the Paris Club, consisting of major creditor nations (excluding China), will convene on Friday, according to two sources.

  • IMF cautions BoG over adoption and use of CBDCs

    IMF cautions BoG over adoption and use of CBDCs

    The International Monetary Fund (IMF) has cautioned that while Central Bank Digital Currencies (CBDCs) hold the potential for enhanced payment systems efficiency and financial inclusion, there exists a looming risk and potential complications if these technologies are not meticulously designed and subject to appropriate regulations. 

    This warning underscores the IMF’s recognition of both the benefits and the necessity for careful governance to avert potential threats associated with the implementation of CBDCs.

    The cautionary message from the Fund is rooted in the research discoveries of three prominent researchers affiliated with the organization: Tobias Adrian, Dong He, and Tommaso Mancini-Griffoli.

    “Benefits are more likely to come in time, following the policies pursued by countries and the private sector’s response, as well as the evolution of technology. In most cases, it would be useful for countries to continue exploring CBDC, carefully and systematically, as IMF Managing Director Kristalina Georgieva noted in her recent speech at the Singapore Fintech Festival,” they said in a publication on the IMF Blog.

    In Ghana, Dr Ernest Addison, the Governor of the Bank of Ghana (BoG) is of the view that, year in year out new financial technologies are developed with the promise of revolutionizing the financial sector, and although most of thses technology may come with their own threats, it is a force for good and a key determinant of the development trajectory.

    He said, “Therefore, our ability to appreciate, adopt, and adapt to technology will help position the financial services industry to drive national development efforts.”

    He added that for a while now, the BoG has created an enabling environment for the digital delivery of financial services.

    “Currently, the financial sector can boast of a variety of digital financial services, including payment, credit, savings, and investment products that are offered by banks and FinTechs. New business models have emerged through FinTech channels and removed barriers to micro-credit as well as paved the way for affordable and convenient inward remittance services.

    “These interventions have fostered financial inclusion in the country, evidenced by the phenomenal improvement in financial access from 41% in 2014 to 68% in 2021, according to the Global Findex Report of the World Bank,” Dr Addison said.

  • Central bank digital currencies must be appropriately designed to check potential risks – IMF

    Central bank digital currencies must be appropriately designed to check potential risks – IMF

    The International Monetary Fund (IMF) researchers, including Tobias Adrian, Dong He, Tommaso Mancini-Griffoli, and Tao Sun, have asserted that Central Bank Digital Currencies (CBDC) hold the potential to enhance payment systems and financial inclusion if appropriately designed, though poorly designed CBDCs may pose risks.

    The researchers recommend that countries carefully and systematically explore CBDCs, emphasizing that benefits are likely to emerge over time based on policy decisions, private sector responses, and technological evolution.

    In Ghana, Bank of Ghana Governor Dr. Ernest Addison acknowledged the rapid changes in information and communication technology and its impact on global activities.

    He highlighted the central role of technology in national development and noted the Bank’s efforts in fostering a conducive environment for digital financial services.

    “Benefits are more likely to come in time, following the policies pursued by countries and the private sector’s response, as well as the evolution of technology.

    “In most cases, it would be useful for countries to continue exploring CBDC, carefully and systematically, as IMF Managing Director Kristalina Georgieva noted in her recent speech at the Singapore Fintech Festival,” they said in a publication on the IMF Blog.

    Dr. Addison emphasized the emergence of various digital financial services, attributing the significant improvement in financial access from 41% in 2014 to 68% in 2021 to interventions supporting financial inclusion.

    He expressed optimism about the potential of a central bank digital currency (CBDC) to further advance financial inclusiveness in the country, grounded in policy imperatives such as financial inclusion, payment safety, efficiency, and the digitalization of the Ghanaian economy.

    “Therefore, our ability to appreciate, adopt, and adapt to technology will help position the financial services industry to drive national development efforts,” he stated.

    “Currently, the financial sector can boast of a variety of digital financial services, including payment, credit, savings, and investment products that are offered by banks and FinTechs. New business models have emerged through FinTech channels and removed barriers to micro-credit as well as paved way for affordable and convenient inward remittance services.

    “These interventions have fostered financial inclusion in the country, evidenced by the phenomenal improvement in financial access from 41% in 2014 to 68% in 2021, according to the Global Findex Report of the World Bank,” Dr Addison said.

    The Governor mentioned the publication of a design paper and solicitation of public input as steps taken by the Bank of Ghana to communicate its CBDC concepts, paving the way for a pilot project aligned with the needs and aspirations of Ghanaians. Dr. Addison shared these insights at the eCedi Hackathon awards dinner in Accra on December 14.

    “Despite the progress made, much remains to be done to meet the financial service needs of every citizen in meaningful ways. This therefore calls for an innovative mindset, creativity, and collaboration in exploring novel solutions of which a central bank digital currency is promising. It is therefore our belief that the Bank’s CBDC will further push the frontiers of financial inclusiveness in the country.

    “Indeed, Bank of Ghana’s CBDC exploration journey is grounded on several policy imperatives, including financial inclusion, safety and efficiency of payments, and the growing digitalisation of the Ghanaian economy. Beginning with the publication of a design paper, the Bank of Ghana communicated in clear terms its concepts of CBDC and solicited comments on how to proceed with a CBDC pilot project that will meet the needs and aspirations of Ghanaians,” he said while speaking at the eCedi Hackathon awards dinner in Accra, last Thursday, December 14.

  • Ethiopia fails to meet $33m coupon payment deadline

    Ethiopia fails to meet $33m coupon payment deadline


    Ethiopia has now joined the ranks of African nations facing default, as it failed to meet interest payments following the expiration of a grace period on Monday.

    Finance Minister Ahmed Shide revealed that Ethiopia was obligated to pay a $33 million coupon on December 11, but the government opted not to make the payment, citing its desire to treat all creditors equally.

    This decision places Ethiopia in the company of other developing countries such as Zambia, Ghana, and Sri Lanka that have struggled with Eurobond defaults in recent times.

    Senior Reforms Adviser at the Finance Ministry, Hinjat Shamil, confirmed on Monday that the payment had not been made and would not be fulfilled.

    Ethiopia had previously reached an agreement with bilateral creditors to temporarily suspend debt payments, reflecting the economic challenges exacerbated by the civil war in the northern Tigray region.

    In its restructuring proposal, Ethiopia has called on bondholders to extend the amortization maturity period from July 2028 to January 2032 and reduce the coupon rate from the current 6.625% to 5.5%.

    Notably, the face value of the debt will remain at $1 billion, implying that creditors will not face reductions on their holdings, a move designed to avoid what is commonly known as a “haircut.”

    Earlier this month, an ad hoc committee of bondholders expressed disappointment, deeming Ethiopia’s decision not to pay as both unnecessary and unfortunate.

    The country has expressed its intention to renegotiate its financial obligations through the Group of 20’s Common Framework, a mechanism gaining traction following successful debt restructuring efforts by Zambia and Ghana.

    The Common Framework allows for coordinated debt relief from both public and private lenders, establishing standards for debt treatment.

    As Ethiopia grapples with the economic fallout of the civil conflict in Tigray, which has adversely affected investor sentiment and economic growth, its approach to debt restructuring is being closely monitored.

  • Concerns raised by IMF regarding Ghana’s 17th bailout

    Concerns raised by IMF regarding Ghana’s 17th bailout


    In response to substantial economic challenges faced in 2022, the Government of Ghana sought financial support from the IMF on July 1, 2022.

    The objective was to restore macroeconomic stability and address balance of payments issues, among other priorities.

    After fulfilling all necessary conditions, Ghana successfully secured the first tranche of the $3 billion loan on May 17, 2023.

    The government is presently awaiting approval for the second tranche amounting to $600 million from the Executive Board, with a decision expected in January 2024.

    Despite committing to a three-year IMF program, Ghana is obligated to meet specific conditions outlined in the agreement.

    During the almost one-year duration of the 17th IMF bailout program, the Bretton Wood institution has highlighted several concerns, resulting in the imposition of four major restrictions on the government:

    1. No imposition or intensification of restrictions on making payments and transfers for current international transactions.
    2. No introduction or modification of multiple currency practices.
    3. No conclusion of bilateral payments agreements inconsistent with Article VIII of the IMF Articles of Arrangement.
    4. No imposition or intensification of import restrictions for balance of payments reasons.

    One notable restriction relates to a proposed Legislative Instrument (L.I.) in November, aiming to restrict the importation of 22 selected strategic products into Ghana.

    However, the IMF emphasized that Ghana cannot impose import restrictions during the program’s implementation.

    Additionally, the Gold-for-Oil program, introduced in December 2022 to stabilize fuel prices and the local currency, has faced scrutiny from the IMF.

    The institution called for amendments to the BoG Act, introducing stricter limits for monetary financing and mechanisms to monitor and enforce compliance.

    Consequently, the Gold-for-Oil policy is expected to be phased out. Central Bank Governor Dr. Ernest Addison recently stated that the program has served its purpose and is no longer deemed necessary.

  • I have not resigned – Ken Ofori-Atta

    I have not resigned – Ken Ofori-Atta


    Minister of Finance, Ken Ofori-Atta, has quashed rumors of his resignation from the position within the governing New Patriotic Party (NPP) administration.

    Speculations circulated on Monday, December 18, suggesting his departure from the role of Minister of Finance and Economic Planning.

    In a tweet shared via the X handle of the Office of the Finance Minister, Ofori-Atta, who participated in a thanksgiving event with ministry staff, hinted at his readiness to continue leading the Ministry of Finance into 2024.

    “I am assured that the Lord will continue to lead and guide us in 2024. Our testimony is indeed victory on every side! Humbled to be leading the brilliant and resilient TeamMoF,” read the post.

    Ken Ofori-Atta, who recently presented the last budget of the Akufo-Addo administration in November, received a guard of honor from Ministry of Finance staff.

    As the longest-serving finance minister in the 4th Republic of Ghana, he has faced criticism from members of the governing NPP and the public for the management of the Ghanaian economy, currently under an IMF program.


    “Today I joined the staff of @MoF_Ghana in thanksgiving for God’s mercy & preservation in 2023. I am assured that the Lord will continue to lead and guide us in 2024. Our testimony is indeed victory on every side! Humbled to be leading the brilliant and resilient #TeamMoF #Nissi.”

  • Ghana’s IMF board meeting for second tranche loan moved to January 2024 – Report

    Ghana’s IMF board meeting for second tranche loan moved to January 2024 – Report

    Ghana has adjusted its timeline for securing the second tranche of the IMF bailout to January 11, 2024, as reported by Joy Business.

    The shift comes as the nation engages in negotiations with the Official Creditor Committee (OCC) to finalize terms for a debt exchange program with its external creditors.

    Insiders familiar with the OCC negotiations reveal significant headway, especially in discussions with key player China regarding the debt swap.

    Originally, Ghana was slated to meet with the IMF Executive Board in November 2023 to finalize an agreement with external creditors, paving the way for the disbursement of the $600 million second tranche loan facility.

    Ghana had sought financial assistance from the IMF on July 1, 2022, in response to significant economic challenges in 2022. The primary goals were to restore macroeconomic stability and provide support for the balance of payments.

    The first tranche of the $3 billion IMF Extended Credit Facility, amounting to $600 million, was successfully secured on May 17, 2023, after meeting all stipulated conditions.

    Ghana is anticipated to remain under the IMF program for a three-year period as it addresses economic challenges and works toward sustained stability.

  • IMF meeting to decide on payment of second tranche to Ghana moved to Jan. 2024 – Report

    IMF meeting to decide on payment of second tranche to Ghana moved to Jan. 2024 – Report

    The International Monetary Fund (IMF) has reportedly rescheduled the board meeting to review Ghana’s second review under the Fund program and consider the disbursement of $600 million to January 11, 2024.

    This decision follows significant progress made by Ghana with its external bilateral creditors, particularly with China, regarding the terms of restructuring the bilateral debt.

    Negotiations with China, one of the Co-Chairs of the Official Creditor Committee (OCC), have advanced, leading to optimism that all outstanding issues will be addressed before the new board meeting date.

    A draft Memorandum of Understanding (MoU) from the Official Creditor Committee would have been issued by now, but a concern from one of the members reportedly caused a delay.

    Earlier challenges in reaching an agreement with China had led to the rescheduling of the IMF board meeting dates, with the latest being January 11, 2024.

    The rescheduled date is expected to provide sufficient time for the resolution of any remaining issues and for the Official Creditor Committee to issue the necessary MoU on Ghana’s debt restructuring.

  • IMF has never fostered societal development – Alban Bagbin

    IMF has never fostered societal development – Alban Bagbin

    Speaker, Alban Bagbin, has raised concerns regarding the recurring reliance on the International Monetary Fund (IMF) by successive governments during economic crises.

    Addressing an event in the Volta Region over the weekend, Bagbin pointed out that Ghana’s economic challenges stem from development plans influenced by political motives. This tendency has led to the discontinuation of projects when a new party assumes power.

    Bagbin emphasized the need for a comprehensive national development plan and vision. He urged all political parties to unite around this common plan to prevent fragmented strategies and the subsequent abandonment of crucial projects.

    “We leave a lot of uncompleted projects, wasting a lot of national resources and going to beg the IMF to salvage us when we know that the IMF has never supported any society to develop.

    “No society in the world has been developed through the support of the IMF. So, we have been there 17 times and we are worse off, yet we are going again. Cap in hand, begging for salvation,” he stressed.

    His remarks come at a time when the government led by Nana Addo Dankwa Akufo-Ado is currently operating under a $3 billion IMF program, with only the initial installment of $600 million disbursed thus far.

    The state of the Ghanaian economy has been a prominent subject of discussion in recent months, marked by challenges such as soaring inflation, a weakening currency, a general decline in the quality of life, and the overall high cost of living.

    The government has consistently attributed these economic difficulties to the aftermath of COVID-19 and the Russia-Ukraine war. Last year, in response to the challenges, the government sought and secured a $3 billion IMF loan, with the first tranche of $600 million having been deposited into the government’s account.

  • IMF Board approves temporary increase of Poverty Reduction and Growth Trust to 200% of quota

    IMF Board approves temporary increase of Poverty Reduction and Growth Trust to 200% of quota

    The International Monetary Fund (IMF) Executive Board has decided to temporarily increase the limits for accessing the Poverty Reduction and Growth Trust (PRGT). 

    The normal annual access limit, which dictates how much a country can borrow in a single year, has been raised to 200% of quota. 

    Additionally, the normal cumulative access limit, which is the total amount a country can borrow over time, has been increased to 600% of quota. 

    These adjustments are in effect until the end of 2024. This is a measure aimed at providing more financial support to countries facing economic challenges during this specific time frame.

    The mentioned changes aim to provide enhanced assistance to the Fund’s low-income members, like Ghana, amid a difficult and unpredictable global economic situation. 

    The goal is to offer improved support tailored to the specific challenges these countries face.

    The PRGT (Poverty Reduction and Growth Trust) serves as the concessional lending arm of the International Monetary Fund (IMF). 

    Concessional means that the loans provided have favorable terms, and currently, they come with zero percent interest rates. This is designed to make financial assistance more accessible and affordable for countries facing economic challenges, especially those with lower income levels. 

    The zero percent interest rates aim to alleviate the financial burden on these countries as they work towards poverty reduction and sustainable economic growth.

    In March 2023, the IMF Executive Board made a decision to conduct an interim review of the PRGT (Poverty Reduction and Growth Trust) access limits. 

    The review was contingent on achieving substantial progress toward the PRGT’s first stage fundraising target of SDR 2.3 billion. This fundraising goal was successfully met in October 2023, thanks to the contributions of over 40 countries. 

    The accomplishment of this target paved the way for the planned interim review, which likely involves assessing the effectiveness of the PRGT and potentially adjusting access limits based on the achieved funding levels and the evolving needs of member countries.

    The concessional lending through the Poverty Reduction and Growth Trust (PRGT) by the International Monetary Fund (IMF) is governed by specific access limits. These limits were last reviewed in July 2021, establishing normal annual and cumulative access limits at 145% and 435% of quota, respectively. Quota refers to a member country’s financial commitment to the IMF.

    However, in March 2023, the General Resources Account (GRA) access limits, which are applicable to non-concessional lending, were temporarily increased to 200% and 600% of quota. 

    This adjustment in GRA access limits reflects changes in the global economic landscape. The mention of aligning PRGT access limits with the prevailing GRA access limits indicates a coordination between concessional and non-concessional lending frameworks within the IMF. 

    This alignment ensures a coherent and responsive approach to the diverse financial needs of member countries in varying economic conditions.

    The temporary increase in PRGT access limits provides greater flexibility for the International Monetary Fund (IMF) to offer support to countries facing substantial balance of payments challenges. 

    This flexibility enables the Fund to assist these countries in implementing robust economic programs aimed at either maintaining or restoring sustainable economic positions. 

    The emphasis on “inclusive growth” suggests that the programs supported by the increased access limits aim not only for economic stability but also for fostering broader social and economic development that benefits a wide range of the population. 

    Essentially, the adjustment in access limits is a tool to better address the unique needs of countries with significant economic challenges, promoting both stability and inclusivity.

    The upcoming Review of the Fund’s Concessional Facilities and Financing, set to be finalized in the Fall of 2024, will encompass an assessment of various aspects. Firstly, it will cover a review of concessional facilities, which includes an examination of access limits. This involves evaluating how much financial support member countries can receive through these facilities.

    Additionally, the review will extend to the financing of the Poverty Reduction and Growth Trust (PRGT). This entails assessing the resources available to the PRGT, focusing on measures to ensure its long-term financial sustainability. 

    This broader review aims to optimize the effectiveness of concessional support provided by the International Monetary Fund (IMF) to member countries, aligning it with evolving global economic conditions and the diverse needs of these nations.

  • IMF urges swift agreement for release of $600m tranche in Ghana, stresses positive economic signs

    IMF urges swift agreement for release of $600m tranche in Ghana, stresses positive economic signs

    The International Monetary Fund (IMF) has disclosed that discussions are currently underway between Ghanaian authorities and the Official Creditor Committee.

    The focal point of these discussions is the release of the second $600 million tranche as part of the three-year $3-billion Extended Credit Facility program. This development holds significance for Ghana‘s economic trajectory and underscores the collaborative efforts required to navigate the challenges and opportunities outlined in the program.

    “We certainly hope that an agreement can be reached soon so that we can rapidly bring the programme to the Board”, Director of the IMF’s Communications Department, Julie Kozack, said at a recent press conference.

    She pointed out that the Ghanaian authorities’ “strong policy and reform commitments under the three-year, $3-billion programme with the IMF is starting to bear fruit”.

    “There are signs of economic stabilisation”, she observed, adding: “Growth in 2023 has proven more resilient than initially envisaged” while “inflation has come down, and the fiscal and external positions have improved”.

    “Moreover, exchange rate volatility has declined”, Ms Kozack added.

    She said on October 6, 2023, “our IMF team reached a staff-level agreement on the first review under the programme, and once this review was completed by the Board, Ghana would have access to $600 million in financing.

    “To ensure timely completion of the review, official creditors and the Ghanaian authorities will need to reach agreement on a debt treatment, consistent with the objectives of the programme, and in line with the financing assurances that creditors provided in May of 2023”, she mentioned.

  • $600m second tranche funding will only be presented after Board review – IMF tells Ghana

    $600m second tranche funding will only be presented after Board review – IMF tells Ghana

    The International Monetary Fund (IMF) has emphasized that Ghana will only gain access to approximately $600 million following a review by its Board of the country’s program.

    This is contingent upon Ghana finalizing a debt restructuring agreement with external creditors, with a particular focus on discussions with China, which has proposed a new cut-off date.

    Ongoing discussions with the Official Creditor Committee aim to determine an agreed-upon date for the debt restructuring process.

    Director of the IMF’s Communications Department, Julie Kozack, stated during a press conference in Washington D.C., USA, that the Board can proceed to approve the $600 million second tranche funding once discussions with external creditors are successfully concluded, and the outcomes are presented to the Board.

    “Once this review was completed by the Board, Ghana would have access to $600 million in financing”, she said.

    She emphasized the importance of Ghana completing discussions with external creditors.

    “To ensure timely completion of the review, official creditors and the Ghanaian authorities will need to reach agreement on a debt treatment, consistent with the objectives of the programme, and in line with the financing assurances that creditors provided in May of 2023”, she said.

    She expressed optimism that both parties will reach an agreement soon.

    “Discussions between the Ghanaian authorities and the Official Creditor Committee are ongoing, and we certainly hope that an agreement can be reached soon so that we can rapidly bring the program to the Board”.

    Regarding Ghana’s macroeconomic indicators, Julie Kozack mentioned that growth in 2023 has demonstrated more resilience than initially anticipated.

    “Inflation has come down, and the fiscal and external positions have improved”.

    She added that the exchange rate volatility has declined.

  • IMF acknowledges Ghana as 7th most indebted African country

    IMF acknowledges Ghana as 7th most indebted African country

    Ghana is ranked 7th among African nations with the highest debts to the International Monetary Fund (IMF), totaling $1,644,377,000.

    The Fund’s official website, as of December 6, 2023, discloses the top ten African countries with the highest debts to the organization.

    Egypt leads the list with a debt of $11,968,321,674, followed by Angola, South Africa, and Cote d’Ivoire with amounts of $3,153,816,667, $2,669,800,000, and $2,117,559,620, respectively. This ranking underscores the existing economic challenges confronting these nations.

    The IMF plays a crucial role in providing monetary assistance to governments facing economic hardships. However, the impact of IMF loans on national economies, particularly in certain African regions where debt becomes unsustainable, raises concerns.

    Typically considered a last resort, nations often seek IMF assistance during economic crises to stabilize their financial systems. These loans serve as a financial buffer, alleviating the economic challenges countries may be undergoing.

    Furthermore, global financial support from the IMF can temporarily reinforce a nation’s finances until a more sustainable solution to economic issues is formulated.

    In addition, an IMF loan can improve a country’s credibility among foreign investors, potentially leading to increased foreign direct investment and improved access to global capital markets.

  • Reach agreement on debt treatment soon to aid completion of review – IMF tells Ghana

    Reach agreement on debt treatment soon to aid completion of review – IMF tells Ghana


    The International Monetary Fund (IMF) has conveyed optimism regarding the ongoing negotiations between the Ghanaian government and the Official Creditor Committee.

    The successful resolution of these discussions is seen as a crucial step toward convening the Board of the Fund to review Ghana’s program.

    Once an agreement is reached, it would pave the way for unlocking the $600 million bailout package, which constitutes the second tranche of the $3 billion Extended Credit Facility.

    “Discussions between the Ghanaian authorities and the Official Creditor Committee are ongoing, and we certainly hope that an agreement can be reached soon so that we can rapidly bring the programme to the Board, said at a press conference.

    “To ensure timely completion of the review, official creditors and the Ghanaian authorities will need to reach agreement on a debt treatment, consistent with the objectives of the programme, and in line with the financing assurances that creditors provided in May of 2023”, she added.

    She also stated that the government’s robust policy and reform commitments, as outlined in the three-year, $3 billion program with the IMF are beginning to yield positive results.

    “On Ghana, the authorities’ strong policy and reform commitments under the three-year, $3 billion program with the IMF is starting to bear fruit. There are signs of economic stabilization. Growth in 2023 has proven more resilient than initially envisaged, inflation has come down, and the fiscal and external positions have improved”.

    “Moreover, exchange rate volatility has declined. On October 6, 2023, our IMF team reached a staff-level agreement on the first review under the program, and once this review was completed by the Board, Ghana would have access to $600 million in financing”, she alluded.

    “To ensure timely completion of the review, official creditors and the Ghanaian authorities will need to reach agreement on a debt treatment, consistent with the objectives of the programme, and in line with the financing assurances that creditors provided in May of 2023”, she added.

    In December 2022, Ghana sought assistance from the IMF to address economic challenges, particularly related to public finances and debt management.

  • IMF conditions bar govt from imposing restriction on imported products

    IMF conditions bar govt from imposing restriction on imported products

    The International Monetary Fund (IMF) has communicated to the Ghanaian government that it cannot impose or escalate import restrictions for balance of payments purposes.

    This agreement is part of the IMF bailout package, which commits to providing Ghana with $3 billion in support for its balance of payments between 2023 and 2026.

    “No imposition or intensification of import restrictions for balance of payments reasons”, the Fund stressed on page 76 of the programme document. Amongst other things, there are four decisions the Government of Ghana cannot take while it is still under the IMF programme. These decisions align with performance criteria common to all Fund arrangements, which include:

    • No imposition or intensification of restrictions on making payments and transfers for current international transactions.
    • No introduction or modification of multiple currency practices.
    • No conclusion of bilateral payments agreements inconsistent with Article VIII of the IMF Articles of Arrangement.
    • No imposition or intensification of import restrictions for balance of payments reasons.

    The Fund emphasised that these four performance criteria will be monitored continuously.

    The Government of Ghana unexpectedly suspended the decision to present the Legislative Instrument (L.I.) before parliament, aiming to restrict the importation of 22 listed products.

    The proposed regulation, pushed by the Trade Minister K.T Hammond, sought to place restrictions on the importation of items like rice, cement, fish, sugar, and animal stomachs known as ‘yemuadie.’

    The Trade Minister hoped this regulation would boost the local currency and support the growth of domestic industries. However, the Minority in Parliament called for the withdrawal of the regulation, citing concerns about its potential impact on trade and industry.

  • “We are the poorest people on the globe” – Akufo-Addo says begging for cheaper loans

    “We are the poorest people on the globe” – Akufo-Addo says begging for cheaper loans

    President Nana Akufo-Addo has appealed to the International Monetary Fund (IMF) and the World Bank to help poor and vulnerable countries access cheaper loans to finance their climate action plans.

    He made this call while speaking at the COP28 climate summit in Dubai, where world leaders are meeting to discuss how to tackle the global climate crisis.

    Akufo-Addo said that historically, countries like Ghana and other African nations have been paying more for borrowing money than those who have more resources and wealth.

    He said that this situation was unfair and unsustainable, and that it could only be reversed if the IMF and the World Bank became catalysts for bridging the gap between the rich and the poor.

    “Become bridges for countries like my own and the vulnerable countries to be able to access that … Historically the monies that we have access to have been the most expensive monies in the world, we are the poorest people on the people and when we borrow money we pay more for it than those who have money. That is a situation that can only be reversed if the World Bank and the IMF become this catalyst for being able to access the large monies that are out there. I think that for us for what we have seen in Ghana, it is something extremely important. That is one of the important decisions that have been taken by the …. (inaudible)” he said.

    Akufo-Addo also highlighted the efforts that Ghana has made to implement its climate action plan, which includes increasing renewable energy, restoring degraded lands, and promoting green jobs. He said that Ghana was committed to achieving its targets under the Paris Agreement, but that it needed more support and resources from the international community.

    COP28 is the 28th annual United Nations (UN) climate meeting where governments will discuss how to limit and prepare for future climate change. The summit is being held in Dubai, in the United Arab Emirates (UAE), from 30 November until 12 December 2023.

  • Anticipating IMF board meeting for release of 2nd Tranche before year-end – BoG Governor

    Anticipating IMF board meeting for release of 2nd Tranche before year-end – BoG Governor

    Governor of the Bank of Ghana (BoG), Dr. Ernest Addison, has expressed expectations that the board of the International Monetary Fund (IMF) will convene before the year concludes to deliberate on the release of the second tranche of the $3 billion fund.

    This comes in the wake of the successful review of the initial $600 million tranche. Dr. Addison shared this information during the Q&A session at the 115th Monetary Policy Committee (MPC) press conference held in Accra on Monday, November 27.

    He said “We expect the IMF board meeting to take place before the end of the year, which should also trigger another disbursement of foreign exchange.”

    During the presentation of the 2024 budget statement to Parliament on November 15, Finance Minister Ken Ofori-Atta highlighted that Ghana achieved all six Quantitative Performance Criteria (QPCs) in the first review of the IMF-supported Post-COVID-19 Programme for Economic Growth (PC-PEG).

    The Minister explained that the program undergoes semi-annual assessments by the IMF, involving a staff review mission followed by approval from the IMF Executive Board.

    Disbursements under the program are contingent on the successful completion of each review. The initial review involved an IMF mission assessing Ghana’s progress from September 25 to October 6, 2023.

    This review covered the assessment of:

    i. six (6) Quantitative Performance Criteria (PCs);
    ii. one (1) Monetary Policy Consultation Clause (MPCC) for inflation;
    iii. three (3) Indicative Targets (ITs); and
    iv. nine (7) Structural Reform Benchmarks (SBs) that were due at the end of September 2023.

    “I am glad to inform this august house that based on the IMF’s own assessment (at the staff level) after the first review, Ghana met All six (6) of the Quantitative Performance Criteria (QPCs). The QPCs are a floor on net international reserves, ceiling on primary balance on commitment basis, ceiling on contracting non-concessional loan/guarantee, zero collateralized borrowing, and no accumulation of external debt service arrears.

    “Two (2) out of the 3 Indicative Targets. The two ITs met are a floor on social spending and a floor on non-oil public revenue. The IT on zero net accumulation of payables was extended largely due to the ongoing negotiations with Energy Sector IPP on legacy debt; .

    “Six (6) out of the seven (7) Structural Benchmarks due end-September 2023. The six SBs met are (a) preparation and publication of arrears clearance and prevention strategy, (b) preparation and publication of financial sector strengthening strategy, (c) preparation and publication a strategy for review of earmarked (statutory) funds, (d) preparation and
    publication of a medium-term revenue strategy, (e) a strategy for indexation of LEAP benefits and (f) BoG to approve capital building buffer plans for banks. The seventh SB on the preparation and publication of an updated Energy Sector Recovery Plan which was expected to be completed at the end of June 2023 was strategically completed and
    published on the MoF website in October 2023.

    “Mr. Speaker, the outstanding performance of Ghana during the first (1st) review paved the way for Ghana to reach a Staff Level Agreement (SLA) with IMF on the 6th October 2023, a record five (5) months after the Programme was approved in May 2023.”

  • ‘IMF will be a thing of the past if we develop  agric sector’ – Prof Oquaye

    ‘IMF will be a thing of the past if we develop agric sector’ – Prof Oquaye

    Former Speaker of Parliament, Rev. Prof. Aaron Mike Oquaye, asserts that Ghana will persistently seek financial assistance from the IMF unless it optimally harnesses its natural resources and prioritizes the agricultural sector.

    Emphasizing that substantial investments in agriculture would lead to the development of substantial industries, he envisions a future where the nation achieves self-sufficiency and economic resilience.

    “Today we are at the IMF for the 17th time, and we shall continue to go to the IMF unless we make good use of the matters of the soil, the fruits of the soil naturally given to us by our God,” Prof Oquaye said.

    Speaking at the 2023 Akufo Hall National Best Farmers Lecture held at the University of Ghana in Accra, Rev. Prof. Aaron Mike Oquaye addressed the audience on the topic “Resilience, Technology, and Humanism: The Past, the Present, and the Future of the Ghanaian Farmer.”

    The primary objective of the lecture was to promote agriculture as an appealing career option for the youth, aiming to transform their lives positively. Prof. Oquaye emphasized the need for substantial investments in the agricultural sector, envisioning the emergence of large-scale industries that would render the country self-sufficient and economically stable.

    Drawing a comparison with India, Prof. Oquaye highlighted how India’s strategic focus on agriculture enabled the country to produce enough food to sustain its citizens and others, insulating it from the impact of conflicts in Russia and Ukraine. In contrast, Ghana’s heavy dependence on these nations for food left it significantly affected by the war, despite possessing vast arable lands.

    Prof. Oquaye urged the government to recognize and support the efforts of the University of Ghana, particularly through the Akuafo Hall, in generating interest among the youth in agriculture. He emphasized the importance of self-sufficiency in food production, stating that if Ghana’s farmers could sustain the nation, it would not be vulnerable to disruptions caused by conflicts in other parts of the world.

    Adding to this, Prof. Kwaku Oppong Asante, the Akuafo Hall Master, expressed the hall’s readiness to establish a Farmers Center of Excellence.

    This center would oversee the guidance of students interested in pursuing farming as a business. Additionally, the hall pledged to provide office space on campus for the National Best Farmer and take charge of organizing an annual farmer’s symposium, all aimed at making farming more appealing to the youth.

  • Govt’s excessive borrowing led to IMF bailout – Ex deputy finance minister

    Govt’s excessive borrowing led to IMF bailout – Ex deputy finance minister

    Former Deputy Minister for Finance, George Kweku Ricketts-Hagan, contends that Ghana’s excessive dependence on external borrowing compelled the country to seek a bailout from the International Monetary Fund (IMF).

    Mr. Ricketts-Hagan attributes the need for the bailout to Ghana’s failure to meet its debt obligations.

    He points out that Ghana has significant outstanding debts, including $2 billion to the Paris Club, $3.8 billion to the Chinese government, $3.8 billion to Non-Paris Club members, $8.8 billion to the IMF, and $14.9 billion to the Eurobond market.

    “This accumulation of debt positions Ghana as the leading borrower in Africa.

    “We went to the IMF because we were not able to service our external and domestic debts,” he stressed.

    Mr. Ricketts-Hagan pointed out that Ghana’s external debt stands at $31 billion, approximately equivalent to GHS 377 billion.

    Despite implementing a domestic debt exchange program, he expressed concern that the weight of these debts continues to significantly impact the government.

    During an interview on the Ghana Yensom Morning Show with Odeyeeba Kofi Essuman on Accra 100.5 FM on Friday, November 24, 2023, Mr. Ricketts-Hagan attributed the government’s return to the IMF to its insatiable appetite for borrowing.

    He argued that if the government had not engaged in reckless borrowing, there would have been no need to seek another IMF deal, especially after exiting an IMF program in 2018.

  • Professor Quartey urges govt to utilize IMF funds for unfinished road projects

    Professor Quartey urges govt to utilize IMF funds for unfinished road projects

    The government should allocate a portion of the second tranche of $600 million from the International Monetary Fund (IMF) to finalize abandoned road infrastructure projects.

    This recommendation comes from Professor Peter Quartey, the Director of the Institute of Statistical Social and Economic Research (ISSER) at the University of Ghana.

    According to him, addressing the country’s infrastructure challenges and facilitating the transport of goods and services can be achieved by completing these projects.

    Professor Quartey made these remarks during the ISSER’s review of the 2024 Budget Statement and Economic Policy in Accra, conducted by an 11-member team of academics from the institute, with support from adb and Stanbic Bank.

    The team includes Prof. Peter Quartey, Professor Isaac Osei-Akoto, Professor Augustine Fosu, Prof. Charles Ackah, Professor Festus Ebo Turkson, Dr Ama Fenny, Dr Andrew Agyei-Holmes, Dr Richmond Atta-Ankomah, Dr Ralph Armah, Dr Naa Ama-Asante-Poku, and Dr Gloria Afful-Mensah.

    Prof. Quartey emphasized that leaving the abandoned road infrastructure projects incomplete would incur higher costs.

    “Road is very significant as it goes to key and production areas. So once the roads are good, you are connected and would enhance production and distribution and reduce the amount of time people spend in traffic,” he stated, as some of the economic benefits of improved road network.

    According to Prof. Quartey, poor road infrastructure increased fuel consumption, caused traffic jams, pollution, and productivity delays, all of which had a significant financial cost.

    Turning his focus on the budget, he said the 2024 budget was “modest since the government was making efforts not to overspend in 2024.”

    He argued that the IMF program alone wouldn’t solve the country’s economic challenges, emphasizing the need for prudent spending and effective revenue mobilization.

    Among several recommendations, the ISSER Director urged the government to implement measures to increase tax revenue for budget financing and development projects. Proposals included revising property rates and expanding the tax net to include informal sector workers.

    With the government targeting about GH¢176.4 billion in revenue next year and planning to spend GH¢226.7 billion, much of it from domestic sources, Professor Quartey expressed concern about the government’s heavy reliance on Treasury Bills and Bonds. He warned that this approach could negatively impact the economy and crowd out the private sector.

    Prof. Quartey suggested reintroducing road tolls to generate revenue for improving road infrastructure.

    He also advocated for increased financial investment in the real sector, particularly agriculture, services, and industry, to create jobs and stimulate economic growth.

    Highlighting the need for better implementation of the Planting for Food and Jobs 2.0 initiative, he recommended government support for the production of cereals, grains, and meat to reduce reliance on imports.

    Additionally, Prof. Quartey proposed a review of the free Senior High School policy for more effective implementation.

    He also called for alternative funding sources for the National Health Insurance Scheme, suggesting the creation of an Endowment Fund and private sector involvement in raising financial resources for the scheme.

  • IMF cautions against premature relaxation of stabilization policies in African economies

    IMF cautions against premature relaxation of stabilization policies in African economies

    As some sub-Saharan African nations, Ghana included, are on the path to economic recovery from recent shocks, the International Monetary Fund (IMF) issues a warning against prematurely relaxing stabilization policies.

    In Ghana, Finance Minister Ken Ofori-Atta informed Parliament about the government’s efforts to steer the nation’s economy toward growth.

    Ofori-Atta attributed the ongoing economic recovery to the swift implementation of robust fiscal and monetary measures throughout the past year and the first half of 2023.

    “So far, growth in 2023 has been more resilient than expected, inflation has declined in line with the fundamentals, the fiscal and external balances have improved, and the exchange rate has stabilised,” he said when he delivered the 2024 budget statement in the House on Wednesday, November 15.

    The Akufo-Addo administration is committed to upholding discipline in order to keep the economy stable, he added.

    After the government finished the first review of the three-year, $3 billion International Monetary Fund External Credit Facility (IMF-ECF) program successfully, he said the country had turned the corner in terms of the economic difficulties.

    “We turned the corner when we completed the IMF first review,” he told Parliament while presenting the 2024 budget statement on Wednesday, November 15.

    He further assured that the government is poised to “maintain stability and keep growing.  and ensure increased growth, currency stability”

    “We turned the corner when inflation started declining from 54 1 in December to 35.2 in October 2023, he added. “The recovery is indeed real and is here to stay,” he further assured.

    “To ensure that the coming rebound is more than just a transitory glimpse of sunshine, it is important for authorities to guard against a premature relaxation of stabilization policies, while also focusing on reforms to both claw back lost ground from the four-year crisis and also to create new space to address the region’s pressing development needs,” the IMF said.

  • Current IMF programme will cost Ghanaians the most – Economist

    Current IMF programme will cost Ghanaians the most – Economist

    A lecturer in Finance and Economics at the University of Ghana, Dr. Patrick Asuming, has characterized Ghana’s recent programme with the International Monetary Fund (IMF) as the most costly to ordinary Ghanaians.

    During a panel discussion at the Graphic Business/Stanbic Bank Breakfast Meeting, he expressed concerns over the sacrifices imposed on Ghanaians, describing them as unbearable and problematic.

    Dr. Asuming urged the government to ensure that the country does not return to the IMF any time soon. He specifically pointed out that conditionalities such as the Domestic Debt Exchange (DDEP) have brought significant hardships to businesses and households.

    “This is the most costly IMF programme for the ordinary Ghanaian by way of the nature and the level of sacrifices that we have been asked to make for the programme to come into being, for both ordinary Ghanaian households and businesses. A big part of the domestic debt exchange and the challenges and problems it has brought on to us, our senior citizens.”

    The IMF Executive Board approved, on May 17th, 2023, an SDR 2.242 billion (about US$3 billion) 36-month Extended Credit Facility (ECF) arrangement for Ghana.

    This decision enabled an immediate disbursement equivalent to SDR 451.4 million (about US$600 million). The rest is expected to be disbursed in tranches every six months, following program reviews approved by the IMF Executive Board.

    According to the IMF, its programs in general seek to boost social spending to improve socioeconomic outcomes and help promote inclusive growth.

    Meanwhile, Speaker of Parliament, Alban Bagbin, has accused the International Monetary Fund (IMF) of pressuring the Ghanaian Parliament to pass several bills, including the Affirmative Action Bill, under a certificate of urgency.

    Speaker Bagbin suggested that these bills are being pushed by the IMF as part of the conditions for the disbursement of the remaining $3 billion credit facility for Ghana.

    Speaking at the Speaker’s Breakfast Meeting, Mr Bagbin on Monday, November 20, asserted that Parliament would not be coerced by the IMF into passing the bills.

    “Even in this budget, you can see the arm of the IMF in a lot of provisions in the budget. A critical bill like the Affirmative Action Gender Equality Bill has come to Parliament under a certificate of urgency. Please, it won’t happen; we won’t pass it under a certificate of urgency.”

    “There are critical stakeholders we must consult and make sure we go together. We will not be dictated by the IMF; that one, you can be assured. This is a very critical bill that the IMF should know that we need the buy-in of the stakeholders to be able to implement it,” Alban Bagbin said.

    The Affirmative Action Bill aims to promote gender equality and increase the participation of women in decision-making roles.

  • Speaker Bagbin accuses IMF of pressuring govt to pass bills under certificate of urgency

    Speaker Bagbin accuses IMF of pressuring govt to pass bills under certificate of urgency


    Speaker of Parliament, Alban Bagbin, has accused the International Monetary Fund (IMF) of pressuring the Ghanaian Parliament to pass several bills, including the Affirmative Action Bill, under a certificate of urgency.

    Speaker Bagbin suggested that these bills are being pushed by the IMF as part of the conditions for the disbursement of the remaining $3 billion credit facility for Ghana.

    Speaking at the Speaker’s Breakfast Meeting, Mr Bagbin on Monday, November 20, asserted that Parliament would not be coerced by the IMF into passing the bills.

    “Even in this budget, you can see the arm of the IMF in a lot of provisions in the budget. A critical bill like the Affirmative Action Gender Equality Bill has come to Parliament under a certificate of urgency. Please, it won’t happen; we won’t pass it under a certificate of urgency.”

    “There are critical stakeholders we must consult and make sure we go together. We will not be dictated by the IMF; that one, you can be assured. This is a very critical bill that the IMF should know that we need the buy-in of the stakeholders to be able to implement it,” Alban Bagbin said.

    The Affirmative Action Bill aims to promote gender equality and increase the participation of women in decision-making roles.

    The Affirmative Action Bill is a proposed legislation that seeks to provide gender parity in Ghanaian politics. The bill aims to increase women’s participation in decision-making positions by proposing that at least 40% of public offices be reserved for women.

    The bill has been in parliament for over a decade but has not received the needed attention for it to become law.

    The IMF Executive Board approved, on May 17th, 2023, an SDR 2.242 billion (about US$3 billion) 36-month Extended Credit Facility (ECF) arrangement for Ghana.

    This decision enabled an immediate disbursement equivalent to SDR 451.4 million (about US$600 million). The rest is expected to be disbursed in tranches every six months, following program reviews approved by the IMF Executive Board.

    According to the IMF, its programs in general seek to boost social spending to improve socioeconomic outcomes and help promote inclusive growth.

  • Ghana anticipates signing debt-relief agreement to access $600 million from IMF

    Ghana anticipates signing debt-relief agreement to access $600 million from IMF

    Ghana hopes to get a deal to lower its debt in the next week so it can get more money from a $3 billion loan program from the International Monetary Fund. Finance Minister Ken Ofori-Atta said this.

    “Ofori-Atta said that a basic agreement on the restructuring details should be reached next week,” during his annual budget speech in Accra. “We think the creditor committee will make a plan with France and China to give an agreement to the IMF. ”

    Ghana’s bonds that need to be paid back in 2049 dropped a little bit in value, to 41. 18 cents on the dollar.

    The IMF and Ghana agreed on a plan last month for the first review of the program that began in May. The lender in Washington has said they will give West Africa $600 million more if the country’s lenders agree to specific debt conditions that were promised a few months ago.

    Ghana is making changes to almost all of its $50 billion debt to make it manageable under the IMF program. The government has finished making changes to its loans within the country. The next move is to improve $13 billion in eurobonds.

    Discussions are ongoing with people who have eurobonds and the government is looking at ideas from two groups about how to deal with the debt.

    “He said that in the next few weeks, we will have long discussions with both groups to make sure we reach the goals set by the IMF/World Bank Debt Sustainability Framework. ” “We think things will get better by the end of the year. ”

    This month, Fitch Ratings said that Ghana’s credit score got better because the government finished making changes to its debt. This saved them a lot of money.

    Ofori-Atta’s budget did not include measures that voters might like because there will be an election next year.

    The finance minister explained how they are going to make the economy grow, reduce prices from going up, and make the budget better next year. They said that these plans are starting to work because of the strict rules from the IMF agreement.

    He predicted that the economy will grow by at least 2. 8% next year and by 5% in 2027, compared to 2. 3% in 2023 The central bank’s plans to control high prices should reduce inflation to 15% by the end of 2024. In October, the percentage was 35. 2%

    “Ghana is improving and getting back on course,” Ofori-Atta said. He said Ghana is committed to keeping the economy stable by being disciplined, kind, and creative.

    Other things to know about the budget:

    The economy is expected to make 1 trillion cedis for the first time in 2024.

    We expect the non-oil economy to grow by at least 2. 1%

    Next year, it is expected that we will have a surplus of 0. 5% in our budget.

    In 2024, it is predicted that the amount of foreign currency saved will be enough to pay for at least three months worth of imports.

    More taxes will be added on plastic packaging, and emissions from factories and vehicles to protect the environment.

    The government will look at how much money people can earn without paying taxes.

    The government wants to stop charging taxes on electric buses and other public transportation vehicles for eight years.

    A 5% flat tax rate will be applied to all commercial properties instead of the current 15% standard rate.

    Source: The Independent Ghana

  • President of Malawi forbids himself from travelling abroad over bad economy

    President of Malawi forbids himself from travelling abroad over bad economy

    Malawi’s President Lazarus Chakwera has stopped all government officials and himself from traveling outside the country to save money.

    Malawi’s money lost a lot of value, so they borrowed money from the IMF to help their economy.

    Mr Chakwera has told all ministers who are in other countries to come back home.

    Senior government officials will now receive half the amount of money for fuel that they used to get.

    Malawi’s economy has been going through tough times, with not enough petrol and diesel, and prices for things going up a lot.

    On TV, Mr. Chakwera said the rules will stay until March 2024.

    Some steps to save money were introduced during the Covid-19 pandemic, but they didn’t have much impact because they weren’t strictly enforced.

    To help with the high cost of living, the president wants the finance minister to plan for a fair pay raise for all government workers in the next budget review.

    He has decided to reduce the amount of income tax that people have to pay in the next budget. This will help workers who are earning less money.

    Experts believe that lowering the value of the country’s money may have been necessary to get a loan from the IMF.

    Some people are worried that if the currency loses value, prices will go up and make the financial situation in Malawi even worse than it was ten years ago.

    Officials say that the bad economy is because of things outside of the country, like a really bad storm and the war in Ukraine.

  • IMF is not meant to handle our predicaments – Oppong Nkrumah

    IMF is not meant to handle our predicaments – Oppong Nkrumah

    Minister of Information, Kojo Oppong Nkrumah, has clarified why Ghana’s financial issues surpass the current bailout package that the government is requesting from the International Monetary Fund (IMF).

    He emphasized that although Ghana was a victim of international economic difficulties, the country’s current $3 billion bailout support depended on a domestic initiative created by the government.

    “Anytime I speak about the IMF, I am quick to mention that the IMF transaction is not the solution to our problems,” he said in an interview on Joy News’ The Probe programme on November 12.

    He continued: “The IMF transaction is financing to underpin our PC-PEG [Post Crisis Programme for Economic Growth], which is our programme to recover from the economic challenges that we’ve had.

    “The entire world has had economic challenges. In fact, I was watching a speech of the former President Mahama delivered abroad just about a week ago where he explains how the challenges in the global economy affected the Ghanaian economy.

    “Everybody knows that there has been a global economic challenge and it has affected Ghana, and various countries have been developing their various plans,” he added.

    The government denied in a statement released late last week that it had missed the deadline of November 1 for the release of the second tranche of US$600 million from the IMF bailout.

    The minister explained: “The first review has been concluded and Ghana was successful in that review.

    “I think at the end of that review, there was a joint conference between Ghana’s Finance Minister and the Head of the IMF team, and a staff level agreement was signed and announced to undergird our parts of the first review.

    “And then it was mentioned that the staff level agreement would have to go to the IMF Executive board which board meets in the 3rd week of November to give its approval, and when that approval is given, then the second tranche would be disbursed,” he stressed.

    The economy has been a hot topic in recent months due to a downturn brought on by skyrocketing inflation, declining currency value, and a general decline in the standard of living combined with high living expenses.

    Before agreeing to a US$3 billion IMF loan last year, of which US$600 million as tranche one has been credited to the government account, the government repeatedly pointed the finger at the fallout from COVID-19 and the Russia-Ukraine war.

  • No deadline has been set by the IMF for second tranche disbursement – Finance Ministry

    No deadline has been set by the IMF for second tranche disbursement – Finance Ministry

    The Ministry of Finance has refuted reports that Ghana missed its November 1 deadline for the disbursement of the second tranche of International Monetary Fund (IMF) funds.

    “The attention of the Ministry of Finance has been drawn to above- titled misleading publication on Myjoyonline, about Ghana missing a purported deadline of 1st November, 2023, for the disbursement of the second tranche of International Monetary (IMF) Funds,” a rejoinder by the ministry read.

    According to the Finance Ministry, there is no 1st November, 2023 timeline for disbursement of the second tranche of the IMF funds as “no deadline has been set by the IMF for the second tranche disbursement,” which is due to take place after the IMF Executive Board approves the first review.

    The Ministry made mention of Table 9 on page 72 of the Memorandum of Economic and Financial Policies (MEFP) published on 17th May, 2023 by the IMF referenced by MyJoyOnline.

    “The November 1 stated in this table is an indicative timeline for completion of the first review, based on the observance of the end-June 2023 performance criteria,” the statement added.

    The first review was successfully completed on 6th October, 2023, culminating in a Staff Level Agreement (SLA) on the same day.

    “Whilst the SLA milestone is an important step towards unlocking the second tranche of $600 million under the programme, the timeline set by the Executive Board for the consideration and approval of the first review, is not 1st November, 2023 as published by Myjoyonline. The exact timeline for the Board date is determined by the IMF Executive Board,” the Ministry reiterated.

    Following the clarification, the Ministry of Finance has encouraged the general public and media houses in particular, to seek the facts and truth about any information that comes to their attention, by reaching out to the Ministry for clarification whenever they are in doubt.

    Meanwhile, the Ministry says Government of Ghana is making good progress in accordance with its strategic plan to engage the Official Creditor Committee (OCC) of the Paris Club; secure a Memorandum of Understanding on debt restructuring; and go before the IMF Executive Board for approval of the first review.

  • Mahama Ayariga petitions World Bank, IMF not to support Ghana Financial Stability Fund

    Mahama Ayariga petitions World Bank, IMF not to support Ghana Financial Stability Fund

    Member of Parliament for Bawku Central, Mahama Ayariga, has petitioned the World Bank and the International Monetary Fund (IMF) to desist from offering any assistance to the Ghana Financial Stability Fund (GFSF).

    In his petition letter, Mr Ayariga noted that the Minister of Finance and Economic Planning, Mr. Ken Ofori Atta, seeks to establish a Ghana Financial Stability Fund (GFSF) using mere guidelines and putting it under the administration of an illegal and unconstitutional body known as Ghana Amalgamated Trust Plc (GAT) based on opaque and legislatively unauthorized management and disbursement mechanisms.

    “It is a scheme with potential to deprive private indigenous bank owners the ownership of their assets in these banks after his mismanagement of the financial sector has rendered these banks vulnerable. And it has not been subjected to parliamentary oversight and scrutiny,” he added.

    The Bawku Central MP referred the intentional bodies to a publication by the Ministry of Finance and Economic Planning (MOFEP) dated 22nd August 2023 which is said to indicate that “Government of Ghana (GoG) has established a Ghana Financial Stability Fund (GFSF). The Fund is expected to be funded by Government of Ghana and the World Bank/IMF as its major donor.”

    In Mr Ayariga’s view, the said document by the Finance Ministry will seek to off load an amount of about $750 million to Ghana Amalgamated Trust (GAT) Ltd to be the main agency responsible for disbursing such funds.

    He also holds the position that the Ghana Financial Stability Fund (GFSF) lacks parliamentary approval and has a fraudulent structure.

    He stated that the Minister of Finance in 2019 had an arrangement with GAT, which was sponsored by the Government of Ghana as a limited liability company under the Companies Act, 2016 (Act 992), as sponsors and with NTHC as trustee shareholder in GAT which arrangement allowed NTHC as trustee to hold shares in GAT on behalf of Government.  

    “We have contended in court that this is an unconstitutional scheme to transfer public funds to private ownership without the requisite parliamentary approval,” he added.

    On 3rd March 2022, the Bawku Central MP noted that an action at the Supreme Court of Ghana to challenge the legality of GAT and the fraudulent activities of GAT and its operations in the case of Mahama Ayariga v. Attorney General & Others (Suit No. J1/20/2022) and the issue is currently pending.

    He therefore finds it strange that GAT and MoFEP, knowing well that the case is still pending in court will still want to “undertake an illegality this time on a very large scale.”

    Mr Ayariga indicated that the International Monetary Fund (IMF) and the World Bank will be acting in clear violation of the Constitution of Ghana of 1992 “if they lend their support to this arrangement or are in anyway party to it.”

    “Article 192 of the Constitution of the Republic of Ghana states categorically that a “public corporation shall not be established except by an Act of Parliament.” Article 179 recognizes the setting up of public corporations as commercial ventures.  The current arrangement by which the Government of Ghana seeks to use NTHC Ltd to hold shares in GAT for a commercial venture offends the Constitutional requirement, which vests Government with the authority to only engage in a commercial venture through the medium of a public corporation enacted by an Act of Parliament,” he added.

  • We went to IMF for $3bn, we don’t have $800m to entice you – Ken Agyapong told

    We went to IMF for $3bn, we don’t have $800m to entice you – Ken Agyapong told

    Former Member of Parliament for the Okaikwei North constituency, Fuseini Issah, has refuted claims made by NPP presidential aspirant and Assin Central MP, Kennedy Agyapong, suggesting that he was offered $800 million to withdraw from the race.

    In an interview with Time FM, Mr Agyapong said, “Does he know the number of people who have approached me but for the love of Ghana and the delegates I have said I will never do it?

    “The money they offered is $800 million, if he doesn’t know. He should ask Mr Oppong Bio, if that is what they are saying but I said no I will not step down, Ghana first.

    “In 2016, you people were not able to buy pickups. How come today you are able to offer me $800 million? So I said I won’t step down…” he stated.

    But Fuseini Issah believes it is highly improbable as the government, due to the economic crisis, went for a $3 billion External Credit Facility from the International Monetary Fund (IMF).

    According to him, it would be unwise for the government to make such a move when it is working assiduously to see the economy recover.

    “$800 million is a lot of money. This country is currently under an IMF programme. We went to the IMF for $3 billion and we are getting tranches of $600 million. Where are we going to get $800 million to give to Honourable Ken Agyapong,” Mr Issah said.

    Meanwhile, the campaign team of Vice President Dr Mahamudu Bawumia has outrightly rejected claims by Assin Central MP, Kennedy Agyapong, that their candidate offered him $800 million to withdraw from the New Patriotic Party’s (NPP) flagbearer race slated for November 4, 2023.

    Dr Gideon Boako, the spokesperson for the Vice President in a press statement noted that the Dr Bawumia, since he entered the NPP race, has not privately met Mr Agyapong and neither has he nor his camp met the Assin Central MP to “negotiate anything in respect of this contest.”

    “The Vice President and his team consider this $800 million claim as absolutely ridiculous, and it shows gross disregard for the intelligence of Ghanaians,” the statement added.

    According to the camp, this is so because “Dr. Bawumia is, and has always been confident that by the Grace of God, he will defeat Hon. Kennedy Agyapong quite well on November 4th” thus” has never entertained any wish for him to step down from the contest.”

    “It is instructive to note that the latest allegation by Kennedy Agyapong, is a rehash of a similar allegation he made about a month ago, claiming without proof, that he was offered money to step down and be a running mate to Dr. Bawumia – a baseless claim we publicly denied on September 30, 2023.”

    “The Vice President is a man noted for his modesty, and he remains committed to his life-long values of serving people with his intellect. While urging the public to disregard such outrageous lies, directed subtly at the Bawumia Campaign, we also reiterate Dr. Bawumia’s commitment to running a decent campaign devoid of personality attacks, lies, and insults to preserve the unity of our great party,” the statement added.

  • 2023 has been challenging for Africa but 2024 will get better – IMF

    2023 has been challenging for Africa but 2024 will get better – IMF

    Managing Director of the IMF, Kristalina Georgieva, has noted that African economies faced multiple challenges throughout the year.

    She highlighted that these economies were still recovering from the impact of the global pandemic, COVID-19, while simultaneously grappling with high borrowing costs and the rising cost of living.

    As African nations strive to overcome their economic difficulties, the IMF remains optimistic that these economies will regain their footing in the upcoming year.

    Kristalina Georgieva emphasized that the outlook for 2024 is promising, indicating a gradual strengthening of economic activity and notable growth. Additionally, there’s a positive trend of decreasing high inflation rates and narrowing fiscal imbalances.

    “We had very productive discussions on Africa’s economic prospects. This year has been a difficult year for Africa. The region is still emerging from the Covid-19 pandemic and African countries have been hit by high borrowing costs (“funding squeeze”) and a cost-of-living crisis,” She said.

    In Ghana, the local economy faced a significant downturn in 2020 due to the outbreak of the COVID-19 pandemic. It remained in a fragile state for an extended period, and the situation was further exacerbated by the Russia-Ukraine war.

    In an effort to combat high inflation and stabilize the economy, the government announced on July 1, 2022, its decision to seek a $3 billion financial bailout program from the International Monetary Fund (IMF). Subsequently, an IMF team visited the country from July 6 to July 13, 2022, to engage with Ghanaian authorities regarding potential economic support.

    A staff-level agreement between the Government of Ghana and the IMF was successfully reached in December 2022. On May 17, 2023, the IMF’s executive board granted approval for Ghana’s $3 billion loan facility.

    The first installment of $600 million was received by the Bank of Ghana (BoG) on Friday, May 19, 2023. The government’s objective with the IMF program is to restore macroeconomic stability and ensure debt sustainability, among other objectives.

  • Help Ghana fight corruption – Govt ‘begs’ IMF

    Help Ghana fight corruption – Govt ‘begs’ IMF

    Ghana has reached out to the International Monetary Fund (IMF) seeking their assistance in tackling the issue of corruption within the country.

    This request is in line with Ghana’s commitments under the $3 billion IMF programme, from which Ghana is anticipating a second installment of $600 million in November. 

    The IMF programme’s primary objectives are to address Ghana’s existing economic challenges and foster transparency and anti-corruption measures.

    As part of this comprehensive program, the Ghanaian government has made a formal request to the IMF for technical support to conduct a corruption diagnostic assessment within its governance framework.

    This assessment is crucial as it will contribute significantly to the ongoing efforts aimed at updating the National Anti-Corruption Action Plan. 

    Additionally, the government is set to rectify weaknesses within the current asset declaration system for public officials by enacting a new Conduct of Public Officers Act.

    During a press briefing at the IMF-World Bank meetings in Marrakech, Morocco, the IMF’s African Department Director, Abebe Aemro Selassie, provided an update on Ghana’s progress.

    He emphasized that this initiative represents Ghana’s dedication to promoting good governance and fighting corruption, as specified in the IMF programme.

    Selassie stated, “On the governance diagnostic report, I think the request has been made [but] I’m not sure where we are in terms of being able to provide that, but as soon as we have the resources, we will do that. And it’s just a matter of time, I believe.”

    Meanwhile, the IMF has pledged to provide all necessary support to the creditors to ensure that Ghana receives the second installment of IMF funds and can proceed with the programme.

    Selassie further explained, “Action is also needed from the creditor side, and I have to tell you that, you know, whereas it took, I think, something like 9 months or more for Zambia to get the official creditor committee to be created, in Ghana’s case it was fairly rapid. So that’s what allowed us to go to the board and get the program approved. And we’re very hopeful that the ongoing discussions among official creditors will also expeditiously allow us to conclude the upcoming review. Again, the most recent Mission reached an agreement with the government on policies that are needed to tackle the most recent issues and also put in place an important budget for next year. So Ghana has done its fair share, and it’s for creditors to take steps, and we’re not going to be asking the government to do more adjustments because creditors haven’t asked either, so you know we will provide all the information necessary so creditors can move to allow us to go to the board as soon as possible.”