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Tag: IMF

  • Ghana has fulfilled its responsibilities, we are looking up to external creditors – IMF Africa Boss

    Ghana has fulfilled its responsibilities, we are looking up to external creditors – IMF Africa Boss

    The Director of the African Department at the International Monetary Fund (IMF), Abebe Aemro Selassie, has indicated that Ghana has implemented the necessary measures to secure the much-discussed financing assurance from its external creditors.

    He mentioned that the IMF is currently awaiting responses from the bilateral creditors.

    Mr. Selassie made these remarks in response to questions from journalists after releasing Africa’s Regional Outlook Report during the Annual IMF/World Bank meetings held in Marrakesh, Morocco.

    He emphasized the importance of action on the part of the creditors.

    He explained,“I have to tell you that whereas it took something like nine months or more for Zambia to get the official creditor committee to be created, in Ghana’s case, it was fairly rapid.”

    He further noted that “Ghana has done its fair share, and it’s for the creditors to take steps.”

    Mr. Abebe Selassie revealed that the IMF will provide all necessary information for creditors to take appropriate action, allowing them to move forward and present the matter to the Board as soon as possible.

    He expressed hope that ongoing discussions among official creditors would facilitate a swift conclusion to Ghana’s upcoming review, emphasizing that the recent mission had reached an agreement with the government on policies to address current issues.

    “We will provide all the information necessary, so creditors can move, allowing us to go to the Board as soon as possible,” Mr. Abebe Selassie added.

    Regarding Ghana’s First Programme Review and the IMF Board Meeting, it was announced on October 6 that the IMF staff had reached a staff-level agreement with Ghana on the first review of the Extended Credit Facility.

    This was a result of discussions led by Mission Chief For Ghana, Stephane Roudet, to evaluate reforms and policy priorities within the context of Ghana’s three-year program under the Extended Credit Facility.

    Ghana is expected to secure a Memorandum of Understanding from Bilateral External Creditors, enabling the IMF board to approve Ghana’s First Programme Review and disburse approximately $600 million in November 2023.

    The IMF Mission Chief for Ghana indicated that as part of the creditor committee meetings, the IMF itself would move to approve the second tranche of $600 million once a deal is reached.

    The IMF Board is scheduled to meet on Ghana’s program on November 22, according to sources knowledgeable about the country’s program in Washington, DC, USA.

    Mr. Abebe Selassie described Ghana’s performance under the IMF program as satisfactory, expressing contentment with the progress made in implementing the program.

    He noted that significant steps had been taken to address macroeconomic imbalances that were at the root of recent crises.

    Regarding the Ghanaian government’s request for IMF support in combating corruption, Mr. Abebe Selassie acknowledged the request and indicated that once resources are available, they will provide the necessary technical assistance for governance diagnostic reports to address corruption-related matters.

  • LIVESTREAMING: Ghana delegation holds press briefing at IMF, World Bank Annual meetings

    LIVESTREAMING: Ghana delegation holds press briefing at IMF, World Bank Annual meetings

    Finance Minister, Ken Ofori-Atta, Leader of Ghana’s Delegation to the 2023 IMF/World Bank Annual meetings in Marrakech (Morocco), held a press conference today.

    Meanwhile, Ken Ofori-Atta, has characterized the IMF-World Bank Annual Meetings as an opportunity to initiate a fresh start for the global financial structure.

    Addressing a Roundtable Discussion on “IMF Policy Priorities,” Mr. Ofori-Atta urged the IMF to bolster the global financial safety net by implementing substantial reforms to the global financial framework, stressing that “we need to stretch the IMF to do more.”

  • Zambia debt deal nearing completion, not yet officially signed – IMF

    Zambia debt deal nearing completion, not yet officially signed – IMF

    An IMF spokesperson said on Thursday that Zambia, which signed a preliminary agreement in June to restructure a portion of its debt, is close to finalizing a memorandum of understanding with its creditors but it is not yet fully finalized.

    “An agreement on the memorandum of understanding is almost finalized and signing is expected soon. “, said this spokesman for the institution, whose Managing Director Kristalina Georgieva had previously prematurely announced a signature.

    At an earlier round table discussion organized in conjunction with the annual meetings of the International Monetary Fund (IMF) and the World Bank, which are taking place till Sunday in Marrakech (Morocco), Mrs. Georgieva announced that the deal “has finally been signed.”

    The agreement had not yet been finalized, and the signature was anticipated for next week, according to a source familiar with the situation who spoke to AFP.

    The G7 finance ministers urged for “the finalization of the memorandum of understanding on the restructuring of Zambia’s debt as quickly as possible” in the communiqué that concluded their talks on Thursday in Marrakech.

    This marks the final step in validating the agreement in principle inked in June for the restructuring of $6.3 billion in external debt. This restructuring was one of the stipulations outlined by the IMF in its agreement detailing the aid program with Zambia, aimed at unlocking all disbursements.

    Zambian Finance Minister Situmbeko Musokotwane expressed gratitude to all creditors, saying, “All our creditors have been wonderful; thank you all for giving us this opportunity.” He also reflected on the embarrassment of being mired in a debt crisis situation.

    Nonetheless, he stressed that such an agreement alone is insufficient to provide the quality of life that young Africans aspire to. He emphasized the need for “better growth that creates jobs, so that we no longer have young people attempting perilous journeys across the Sahara and the Mediterranean.”

    Zambia’s debt, which has ballooned in recent years, is estimated at $32.8 billion, with $18.6 billion owed to foreign creditors, particularly China, its primary lender.

    In 2020, Zambia became the first African nation to default on its debt, triggered by the onset of the Covid-19 pandemic.

    The former president of Zambia, Edgar Lungu, is accused of embarking on substantial infrastructure projects and overextending the country’s indebtedness to China (amounting to $4.1 billion). These projects include airports, roads, schools, factories, and even police stations in the country.

    Finance Minister Musokotwane explained, “If you combine what we spend on salaries for our public servants and the servicing of this debt, it represents over 90% of the taxes collected. Now that we’ve got help, we can concentrate the money on the most vulnerable.”

    Zambia had secured a $1.3 billion aid program with the IMF in August 2022 and successfully completed the first review in July, allowing the IMF to monitor the implementation of the reforms outlined in the program.

  • BoG tells IMF to adapt lending toolkits to address global financial architecture for Sub-Saharan Africa

    BoG tells IMF to adapt lending toolkits to address global financial architecture for Sub-Saharan Africa

    Governor of the Bank of Ghana, Dr. Ernest Addison, has proposed several actions to the International Monetary Fund (IMF) in response to the disintegrated global financial framework that is affecting countries in Sub-Saharan Africa.

    During his address at the IMF-African Caucus gathering in Marrakech, Morocco, Dr. Addison urged the IMF to maintain its resolve and modify its lending strategies to align with evolving global circumstances, with the aim of better serving its susceptible member nations.

    “In this context, we restate our earlier request for increased concessional financing by aligning PRGT access thresholds with those of the GRA to ensure uniformity of treatment,“ Dr Addison said.

    “In addition, we call on the Fund to relax the Poverty Reduction and Growth (PRGT) eligibility criteria to foster access to adequate Fund support while reducing, suspending, or eliminating entirely surcharges for most vulnerable PRGT-eligible members facing acute debt challenges,” he added.

    The Governor of the Bank of Ghana reiterated the appeal to the IMF for additional commitments from willing donors to address the shortfalls in PRGT resources.

    He emphasized the vital importance of successfully concluding the ongoing 16th General Review of Quotas (GRQ) to strengthen the IMF’s financial standing while safeguarding the quota share of more vulnerable member nations.

    In response to the present economic difficulties, countries in Sub-Saharan Africa have been advocating for a transformation in the global financial structure to enable greater access to international markets and increased concessional funding.

  • FULL TEXT: BoG Governor’s speech at IMF-African Caucus Meeting

    FULL TEXT: BoG Governor’s speech at IMF-African Caucus Meeting

    I appreciate the opportunity today to speak on behalf of my fellow Governors about making public debt useful for sustainable growth in Africa. But let me first express my deepest commiserations to the authorities and the peoples of Morocco and Libya for the recent devastating tragedies that have claimed many lives, displaced many people, and destroyed properties, while appealing for urgent support from the international community.

    Madam Managing Director, African economies are faced with acute debt challenges underscored by rising social and infrastructural needs, amid spillovers from the Covid-19 pandemic, the war in Ukraine, tightening of global financing conditions, and climate-related disasters. Public debt in sub-Saharan Africa (SSA) has now reached levels last seen in the early 2000s.

    The resultant increased debt service burden, together with complex creditor composition, has heightened risks to debt sustainability, to the extent that more than half of the SSA members are now in or at high risk of debt distress. Simultaneously, protracted high inflation has constricted the policy space, posing difficult policy trade-offs for many members in the region.

    This challenging environment has led to another year of moderated pace of economic recovery, as SSA growth is projected to further decelerate in 2023. While members remain committed to implementing relevant policies and reforms towards enhancing fiscal discipline with the aim of restoring debt sustainability and fostering inclusive and sustainable growth in the continent, a much stronger IMF support would be crucial, amid the current challenging global environment.

    Against this backdrop, I would suggest the following for consideration, Madam Managing Director:

    ▪ Given the fragmented global financial architecture, we urge the IMF to remain steadfast and adapt its lending toolkits to changing global conditions to serve its vulnerable membership better. In this context, we restate our earlier request for increased concessional financing by aligning PRGT access thresholds with those of the GRA to ensure uniformity of treatment.

    In addition, we call on the Fund to relax the PRGT eligibility criteria to foster access to adequate Fund support while reducing, suspending, or eliminating entirely surcharges for most vulnerable PRGT-eligible members facing acute debt challenges. We also reiterate our call for additional pledges from willing donors to close the gaps in PRGT resources. We further stress the criticality of a successful completion of the ongoing 16th GRQ to reinforce IMF finances while protecting the quota share of the vulnerable members.

    ▪ Strengthening multilateral coordination and efficiency of regulatory framework for debt resolution in LICs, through a formidable Global Sovereign Debt Roundtable (GSDR), is paramount. While welcoming the latest developments on Zambia and Chad, we underscore the need to revamp the G20 Common Framework (CF) to ensure timely, orderly, equitable, inclusive, and transparent debt restructuring for distressed members in the region (including, Ghana, Ethiopia, and Malawi). In this regard, we call for a carefully designed debt resolution mechanism, especially, for vulnerable members with large-domestic creditors (as in the case of Ghana) to help avert domestic financial market instability.

    In addition, improving debtor-creditor engagements through an enhanced GSDR while strengthening technical support to foster common understanding of all debt issues is macro-critical to bolster a swifter, proactive and systematic restructuring. We also reaffirm the request for debt standstill during times of negotiations to offer immediate relief to debtors and restate our request for multilateral debt cancellation for the most vulnerable members facing acute debt challenges.

    • Furthermore, an enhanced IMF’s cooperation with MDBs/RDBs is necessary to facilitate timely provision of MDBs/RDBs’ financial assistance for members facing significant debt and growth challenges. In this context, we restate the call for new SDR allocation through the MDBs/RDBs’ (including AfDB), given their multiplier effects in achieving climate and development goals. We also request that the Fund leverages its close engagements with G20 members to advocate for better lending terms from the ongoing design and implementation of the G20 Capital Adequacy Framework (for MDBs) to avert inadvertent financing ramifications on vulnerable members in Africa.

    ▪ Finally, deepening the Fund’s tailored capacity development and surveillance support, in collaboration with other international partners, is crucial to addressing member-specific bottlenecks for restoring public debt sustainability, and bolstering inclusive and sustainable economic growth and development in the region.

    Thank you, Chair and Madam Managing Director

  • Ghana’s economic activities have surprised us on the outside – IMF

    Ghana’s economic activities have surprised us on the outside – IMF

    The International Monetary Fund’s (IMF) Mission Chief for Ghana, Stéphane Roudet, has commended Ghana’s economic growth.

    During an interview on Citi TV’s “The Point of View,” Mr. Roudet expressed that Ghana’s rapid economic recovery is both remarkable and heartening, as the country has exceeded the IMF’s projections for the year 2023.

    He noted that the IMF’s initial projection for Ghana’s economic growth in 2023 was 1.5 percent. However, the first-half report indicates that the country’s economy is expanding at a 3 percent rate, a development he finds highly encouraging. This positive trend is expected to facilitate the smooth release of the second tranche of the $3 billion credit facility from the IMF.

    “Ghana’s economic activities, I have to say, have surprised us on the outside. You will remember that in the programme, we were projecting economic growth of 1.5 percent for this year, and now we have the outcome for the first half of the year, and we are about 3 percent and so you can see that there are signs that are encouraging.”

    “We were assessing that growth will be above 1.5 percent for this year and what we are seeing now is above that, so we will have to revise our growth projection in the context of this review and this is very good news because it means that in spite of the challenges that the Ghanaian economy has faced; the high inflation, the loss of market access for the government, in spite of that, the economy is resilient and growth is still around 3 percent and that very good news.“

    The Ghanaian economy has attained much-needed stability as major economic indices such as inflation and the exchange rate continue to fall, restoring investor confidence, Minister for Finance, Ken Ofori-Atta, has said.

    He said this at a joint press conference with the IMF on attaining a Staff Level Agreement (SLA) after the first review of the IMF-Supported Post-Covid-19 Programme for Economic Growth.

    Sounding optimistic about the future of the economy, he among other things enumerated that, the GDP Growth had rebounded strongly averaging 3.2% in first two quarters compared to 3.0% in same period in 2022 mainly on the back of growth in services (avg. 6.3%) and in Agriculture (avg. 6.2%).

    ‘’Latest Price development in August 2023 indicated a fall in headline inflation, after consecutive upward trends since May 2023. Headline inflation dropped to 40.1 percent, from 43.1 percent in July and 42.5 percent in June 2023, respectively,” he revealed.

    ‘’I am pleased to announce that the progress we sought to achieve is very much on course; the stability that the Ghanaian Economy was very much in need of has been achieved. We said we have ‘Turned the Corner’ and the major economic indicators such as inflation and exchange rate continues to drop and stabilise, and there is confidence returning in the economy,’’ Mr. Ofori-Atta added.

  • ‘We need to stretch the IMF to do more’ – Ofori-Atta

    ‘We need to stretch the IMF to do more’ – Ofori-Atta

    The Minister for Finance, Ken Ofori-Atta, has characterized the IMF-World Bank Annual Meetings as an opportunity to initiate a fresh start for the global financial structure.

    Addressing a Roundtable Discussion on “IMF Policy Priorities,” Mr. Ofori-Atta urged the IMF to bolster the global financial safety net by implementing substantial reforms to the global financial framework, stressing that “we need to stretch the IMF to do more.”

    During the Roundtable, hosted by US Treasury Secretary Janet Yellen, Mr. Ofori-Atta commended the transformative leadership of IMF Managing Director Kristalina Georgieva, which has resulted in the accomplishment of significant milestones.

    Mr. Ofori-Atta also advocated for an IMF that can offer substantial resources on a large scale to enhance the global financial safety net.

    “The need is great. And at these Annual Meetings, the developing world is asking the international community to do all it can to advance a reform agenda that ensures institutions like the IMF have the requisite mandates, financing, and governance models to deliver transformative impact,” he said.

    He called for “reform of the available tools and lending instruments of the Fund to deal with global exogenous shocks.”

    Ken Ofori-Atta exchanging pleasantries with a member of Kuwaiti Delegation after IMF High Level Event on Poverty Reduction and Growth Trust (PRGT) on 11th October 2023 in Marrakech

    On Governance, Mr Ofori-Atta pushed for broad-based prosperity anchored on bold reforms to the global financial architecture, by calling for increased Sub-Saharan African representation on the IMF Executive Board, through the creation of a Sub-Saharan African seat at the IMF Executive Board Level.

    The Marrakech gathering marks only the second time that Africa has hosted the Annual Meetings, the first time being fifty years ago in Kenya, in 1973.

  • IMF predicts decrease in Ghana’s debt-to-GDP ratio for 2023 and subsequent 5 years

    IMF predicts decrease in Ghana’s debt-to-GDP ratio for 2023 and subsequent 5 years

    The International Monetary Fund (IMF) predicts a decrease in Ghana’s debt-to-Gross Domestic Product (GDP) ratio, which is projected to decrease from 92.4% in 2022 to 84.9% in 2023, as indicated in its October 2023 Fiscal Monitor.

    This trend is anticipated to persist over the next five years, with the debt-to-GDP ratio forecasted to be 81.5% in 2024, and subsequently at 78.8% in 2025, 75.8% in 2026, 72.8% in 2027, and 70.0% in 2028.

    This shift is anticipated to occur following the expected external debt restructuring, which is expected to result in a decrease in the country’s debt.

    However, the exact amount saved from the domestic debt restructuring remains unknown at this time.

    Revenue-to-GDP ratio to exceed 16% in next five years

    The IMF is also anticipating a steady increase in Ghana’s revenue-to-Gross Domestic Product (GDP) ratio through 2028.

    In 2023, the government’s revenue-to-GDP ratio is projected to be 15.7%, slightly lower than the 15.8% recorded in 2022.

    Subsequently, from 2024 to 2028, the revenue-to-GDP ratio is estimated at 16.6%, 17.3%, 18.2%, 18.2%, and 18.1%, respectively.

    This represents a significant improvement compared to the rates observed over the past decade.

    However, in 2023 and 2024, the country’s revenue-to-GDP ratio is expected to dip to 16% and 16.2%, respectively.

    Expenditure to remain within 20-21% bracket

    In contrast, the expenditure-to-Gross Domestic Product (GDP) ratio is expected to decrease from 27% in 2022 to 20.3% in 2023. Subsequently, from 2024 to 2028, the expenditure-to-GDP ratio is forecasted to be 20.7%, 20.8%, 21.2%, 20.8%, and 20.9%, respectively.

    Ghana’s public debt up ¢6.3bn within 2 months to reach ¢575.5bn in June 2023

    Ghana’s public debt increased by approximately ¢6.3 billion from April to June 2023, reaching ¢575.5 billion by June 2023, as reported by the Bank of Ghana. This amount is equivalent to $52.3 billion, constituting approximately 71.9% of the Gross Domestic Product (GDP). The marginal rise in the country’s total debt was primarily attributed to a slight depreciation of the cedi against the dollar during that period.

    According to the September 2023 Summary of Economic and Financial Data, the debt stock was ¢473.2 billion in December 2022, accounting for about 77.5% of GDP. Subsequently, it increased to ¢547.8 billion ($50.7 billion) by the end of January 2023, followed by ¢564.1 billion ($51.2 billion) and ¢569.5 billion ($51.7 billion) in February and March 2023, respectively.

  • The economy has not yet recovered, don’t be deceived – Joe Jackson

    Business Consultant and Director of Operations at Dalex Finance, Joe Jackson, has characterized the state of the Ghanaian economy as critically ill, akin to being in the Intensive Care Unit (ICU).

    This perspective contradicts claims that the economy has achieved stability.

    Last week, Ghana achieved a staff-level agreement with the IMF, paving the way for the release of an additional $600 million as part of the $3 billion IMF bailout package.

    Finance Minister Ken Ofori-Atta had portrayed this development as a sign of economic recovery and resurgence. However, during an interview with Francis Abban on GHOne TV’s State of Affairs, Joe Jackson expressed his dissenting view on the matter.

    “The best analogy I can give was that somebody had a road crash, entered into a coma, was rushed to the hospital and was given some blood transfusion and now his condition is described as stable. But the person is still very sick, let’s be clear”, he said.

    “Last year, we suffered bad crash and in December last year we raised up our hands and said we cannot pay [our debts] and everything was going south with us going downhill at a horrendous rate. In March we signed bailout agreement with the IMF which gave us some blood transfusions and gave us some life, but we are still in intensive care let nobody be deceived”, he added.

    In response to claims that there have been improvements in macroeconomic indicators since the initiation of the IMF program, Joe Jackson contends that the extent of these improvements falls short of being deemed a significant turnaround.

    “It’s like I had a BP of 180/140 and today I have come down to 160/120. The numbers are looking better than they did, but my BP is still high. That is the situation now. It is an economy with high taxation, high interest rate and high inflation with some semblance of foreign exchange stability”, he argued.

    Joe Jackson adds that any level of complacency could result in a deterioration of the nation’s poor economic circumstances.

    “This economy needs careful management, this economy is still in intensive care, and you cannot take your eye of the monitors for a minute. If we do, things could go south very very quickly”, he concluded.

    A board approval for the distribution is contingent on the government’s ability to negotiate an MOU on the restructuring of its external obligations with creditors, according to Stephane Roudet, the head of the IMF team in Ghana.

  • Banking specialist suggests amending constitution to include limit on debt

    Banking specialist suggests amending constitution to include limit on debt

    A banking consultant, Dr. Richmond Atuahene, has proposed the inclusion of a debt limit or cap through a constitutional amendment.

    He argued that this step is essential to maintain economic stability and effectively manage debt, thereby preventing a financial crisis, especially in the aftermath of an IMF program.

    Regarding Ghana’s concerning debt levels, which have led the country to request its 17th bailout program from the IMF, Dr. Atuahene emphasized the need for Ghana to implement rigorous measures to increase domestic revenue.

    He also recommended innovative approaches to broaden the tax base and reduce excessive borrowing.

    “To prevent future debt crisis, the government and the legislature must ensure that the 1992 Constitution is duly amended and the Debt-to-GDP Ratio is explicitly enshrined,” the Banking Consultant suggested.

    He continued, “To build back better post-IMF, the country would require aggressive agricultural development strategies with the private sector, over the medium-term, with view to accelerate the modernization of agriculture and ensure its linkage with industry through the application of science, technology and innovation.”

    Meanwhile, the debt ceiling represents a cap on the overall borrowing capacity of the government.

    The 12th edition of the Ghana Economic Forum occurs during one of the most challenging macroeconomic periods in over a decade. This situation is characterized by Ghana’s utilization of a $3 billion Extended Credit Facility (ECF) from the International Monetary Fund and the consequences of the Domestic Debt Exchange Programme (DDEP).

    The theme for this year’s forum is; “Build back better: IMF support, strategies to build a sustainable economy and dynamic business environment.”

    The GEF convened a gathering of financial sector experts and influential thinkers to deliberate on pivotal subjects influencing the nation’s economic terrain.

  • IMF predicts oil price to fall to $80.5 in 2023

    IMF predicts oil price to fall to $80.5 in 2023

    The October 2023 World Economic Outlook, has it that, future markets indicate a projected 16.5% year-on-year decline in crude oil prices, averaging $80.5, compared to the 2022 average of $96.4.

    These prices are expected to continue decreasing to $72.7 by 2026. If this trend holds, it suggests that fuel prices at the pumps may remain relatively stable for the remainder of the year.

    The International Energy Agency anticipates an increase in oil demand by 2023, surpassing supply levels in the latter half of the year. However, the report notes that there is significant uncertainty surrounding the price outlook.

    Potential upside price risks include further production cuts by OPEC+, military tensions in the Black Sea, and insufficient investment in fossil fuel extraction.

    Conversely, downside price risks could result from a global economic downturn, reduced Chinese oil demand, and a faster adoption of electric vehicles.

    While fuel prices experienced a marginal increase at the beginning of the month, it is unlikely that prices will rise in the second pricing window starting on October 16, 2023. Crude oil prices saw a 4.4% increase between February and August 2023, primarily due to a rebound in July and August.

    However, these prices remain well below their peak of $115 in June 2022.

    On the demand side, factors such as a slower-than-expected recovery in China’s oil consumption, concerns over temporary economic downturns due to banking issues, and tighter monetary policies in major economies contributed to downward price pressures, especially in the second quarter of 2023.

    Regarding supply, OPEC+ announced output cuts of 1.2 million barrels per day (mb/d) in April, along with additional voluntary cuts of 1 mb/d by Saudi Arabia and 0.3 mb/d by Russia.

    These reductions were only partially offset by significant oil output growth in non-OPEC countries, notably the United States, where oil production is expected to increase by 1.1 mb/d this year.

  • Ghana to unlock IMF’s $600m loan with official creditors agreement pact

    Ghana to unlock IMF’s $600m loan with official creditors agreement pact

    The International Monetary Fund said that Ghana will need a debt relief agreement from its official creditors to qualify for further disbursements under a $3 billion extended credit facility program.

    The Washington-based lender reached a staff-level deal with Ghana on the first review of the program that started in May, Stéphane Roudet, IMF mission chief, said in a statement Friday.

    Ghana’s dollar bonds rose and were among the best performers in emerging markets. Notes maturing in 2049 gained 0.2 cents to 41.07 cents on the dollar by 2:14 p.m. in London.

    To complete the review, which will give the West African nation access to another $600 million disbursement, bilateral creditors must agree on specific terms of debt treatment, in line with the financing assurances they provided five months ago, he said.

    The financing assurance enabled IMF to approve Ghana’s program, with an initial $600 million disbursement.

    “We’re now in the first review so we’re moving from a general commitment to a specific credit commitment on terms of debt restructuring,” Roudet said at a press conference in the capital, Accra. This will also inform the specific terms for external commercial creditors, he said.

    The lender is treating Ghana like Zambia, which also has an IMF program.

    Earlier this year, the IMF insisted that Zambia’s official creditor committee sign a memorandum of understanding to unlock the next disbursement, but later backed down and approved the payment after the bilateral lenders in June announced an agreement in principle to restructure $6.3 billion of debt.

    “We are confident that the official creditor committee agreement will come through in time for the executive board’s approval in November,” Minister of Finance Ken Ofori-Atta said in an interview, on the sidelines of the press conference.

    Ghana’s policy reform commitment under the program is bearing fruit, Roudet said. Economic growth has proven more resilient than earlier thought, fiscal and external positions have improved, the exchange rate has stabilized and the inflation rate has declined, he said.

    Ghana’s inflation slowed to 40.1% in August, its lowest level in 10 months. The cedi, which weakened as much as 21% earlier this year has pared its losses against the dollar to 13%.

    The country is restructuring almost all of its $50 billion debt to make it sustainable under the IMF program. It has successfully completed its domestic debt rework. The next step is to revamp about $13 billion in Eurobonds.

    Ghana sought IMF help in July 2022 after its dollar bonds plunged and spending cuts failed to convince investors it will be able to repay debt.

  • Ghana’s first review of $3bn bailout concluded, approved by IMF

    Ghana’s first review of $3bn bailout concluded, approved by IMF

    The International Monetary Fund (IMF) has reached a staff-level agreement with Ghanaian authorities after conducting comprehensive discussions in Accra from September 25 to October 6, 2023.

    The discussions centered on assessing progress in implementing reforms and policy priorities as part of Ghana’s economic program under the Extended Credit Facility.

    This agreement, which is subject to approval by IMF Management and consideration by the Executive Board following the receipt of necessary financing assurances, marks a significant milestone in Ghana’s efforts to stabilize its economy.

    Following the Executive Board’s review, Ghana is poised to access approximately US$600 million, augmenting the total financial support provided by the IMF to around US$1.2 billion since May 2023.

    In the face of a severe economic and financial crisis, Ghanaian authorities have undertaken critical macroeconomic adjustments, successfully concluded a domestic debt restructuring operation, and initiated extensive reforms. These efforts have yielded positive results, including stronger-than-expected economic growth, reduced inflation, improved fiscal and external positions, and stabilization of exchange rates in 2023.

    In line with commitments under the Fund-supported program, Ghana has demonstrated robust fiscal performance, working towards a significant reduction in the fiscal primary deficit by approximately 4 percentage points of GDP in 2023. Fiscal spending has adhered to program limits, with a focus on expanding social protection programs to support the most vulnerable segments of the population. Ghana has also met its non-oil revenue mobilization target.

    To sustain these achievements, the next critical step involves securing an agreement with official creditors on debt treatment terms consistent with the IMF Executive Board-approved program parameters and debt targets. The IMF calls on official creditors to expedite this process, aligning it with the financing assurances provided in May 2023.

    Throughout the discussions, meetings were held with key figures, including Vice President Bawumia, Finance Minister Ofori-Atta, and Bank of Ghana Governor Addison, along with their respective teams. The IMF team also engaged with various government agencies and stakeholders, expressing gratitude for their cooperative and transparent collaboration.

  • IMF boss hints at a potential $600M disbursement for Ghana in November

    IMF boss hints at a potential $600M disbursement for Ghana in November

    The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, has expressed optimism regarding Ghana’s economic outlook, acknowledging a significant improvement in the country’s financial standing in recent months.

    Ghana recently secured a $3 billion support package from the IMF and is presently undergoing its inaugural program review, scheduled for completion in November.

    During an interview, Georgieva also highlighted the progress made by both Zambia and Ghana, both of which had faced debt defaults but are now making substantial progress under their respective IMF programs.

    Furthermore, she advised Tunisia that while immediate restructuring might not be necessary, it should take swift measures to strengthen its economy.

    Georgieva emphasized her strong hope for the disbursement of a $600 million second tranche of IMF funds, set for November, underlining its critical role in bolstering confidence in Ghana’s economic stability.

    “Ghana is doing actually quite well. You have seen that their position has improved over the last month, and the economy is in a much better place. I would very much hope that we can have the disbursement,” she said referring to a $600 million tranche of IMF money.

    Read the report of IMF’s mission team below: 

    IMF Reaches Staff-Level Agreement on the First Review of the Extended Credit Facility and Conducts Discussions of the 2023 Article IV Consultation with Ghana

    FOR IMMEDIATE RELEASE

    End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF’s Executive Board for discussion and decision.

    IMF staff and the Ghanaian authorities have reached staff-level agreement on economic policies and reforms to conclude the first review of the 36-month ECF-supported program. Performance with respect to the program’s targets and reform objectives has been very strong.

    Ghana will have access to about US$600 million in financing once the review is approved by IMF Management and formally completed by the IMF Executive Board. To ensure timely completion of the review, the country needs official creditors to quickly reach agreement on a debt treatment in line with the financing assurances they provided in May 2023.

    The authorities’ strong policy and reform commitment under the program is bearing fruit, and signs of economic stabilization are emerging. Growth in 2023 has proven more resilient than initially envisaged, inflation has declined, the fiscal and external positions have improved, and the exchange rate has stabilized.

    Accra, October 6, 2023: An International Monetary Fund (IMF) staff team, led by Mr. Stéphane Roudet, Mission Chief for Ghana, held meetings in Accra from September 25 to October 6, 2023, to discuss progress on reforms and the authorities’ policy priorities in the context of the first review of Ghana’s three-year program under the Extended Credit Facility. The arrangement was approved by the IMF Executive Board for a total amount of SDR 2.242 billion (US$ 3 billion) on May 17, 2023. The team also conducted the 2023 Article IV consultation.

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

    “I’m very pleased to announce that the IMF staff and Ghanaian authorities have reached a staff-level agreement on the first review of Ghana’s economic program under the Extended Credit Facility arrangement. This staff-level agreement is subject to IMF Management approval and Executive Board consideration once the necessary financing assurances have been received. An agreement with official creditors on a debt treatment in line with program parameters would provide the needed financing assurances. Upon completion of the Executive Board review, Ghana would have access to SDR 451.4 million (about US$ 600 million), bringing the total IMF financial support disbursed under the arrangement, since May 2023, to SDR 902.8 million (about US$1,200 million).

    “Faced with an acute economic and financial crisis, the authorities have adjusted macroeconomic policies, successfully completed their domestic debt restructuring operation, and launched wide-ranging reforms. These actions are already generating positive results, as growth in 2023 has proven more resilient than initially envisaged, inflation has declined, the fiscal and external positions have improved, and the exchange rate has stabilized.

    “Consistent with the authorities’ commitments under the Fund-supported program, fiscal performance has been strong, and 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. Ambitious structural fiscal reforms are bolstering domestic revenues, improving spending efficiency, strengthening public financial and debt management, and enhancing transparency.

    “In light of Ghana’s compelling performance under the Fund-supported program, the critical next step is to secure an agreement with official creditors on the terms of a debt treatment consistent with the IMF Executive Board-approved program parameters and debt targets. We urge official creditors to move forward and agree on an appropriate debt treatment in line with the financing assurances they provided in May 2023.”

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

  • Playback: Finance Minister and IMF team address news conference on $3bn bailout

    Playback: Finance Minister and IMF team address news conference on $3bn bailout

    The Ministry of Finance, Bank of Ghana and the International Monetary Fund (IMF) today held a news conference to address Ghana’s bailout.

    Finance Minister Ken Ofori-Atta, Bank of Ghana Governor, Dr Ernest Addison and Stéphane Roudet, Mission Chief at IMF for Ghana took turns to address the press.

    Ahead of the conference, Kristalina Georgieva, the Managing Director of the International Monetary Fund (IMF), has expressed a positive outlook on Ghana’s economy, acknowledging a substantial improvement in the country’s economic standing over the last month.

    Georgieva expressed her strong hope for the disbursement of a $600 million second tranche of IMF funds, slated for November, underscoring its significance in fostering confidence in Ghana’s economic stability.

  • IMF hopeful of disbursing second tranche of $3bn deal by November

    IMF hopeful of disbursing second tranche of $3bn deal by November

    The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, has expressed her strong anticipation of the upcoming disbursement of a $600 million second tranche of IMF funds, scheduled for November.

    She emphasized the importance of this disbursement in instilling confidence in Ghana’s economic stability.

    Georgieva acknowledged a favorable outlook for Ghana’s economy, noting significant improvements in the country’s economic performance over the past month.

    “Ghana is doing actually quite well. You have seen that their position has improved over the last month, and the economy is in a much better place. I would very much hope that we can have the disbursement,” she said referring to a $600 million tranche of IMF money.

    Ghana recently secured a $3 billion IMF support package and is currently undergoing its first program review, with the conclusion of the review expected in November.

    During an interview, Georgieva also touched upon the advancements achieved by Zambia and Ghana, both of which experienced debt defaults but are currently making notable progress under their respective IMF programs.

    Furthermore, she offered guidance to Tunisia, suggesting that although immediate restructuring may not be imperative, the country should swiftly implement measures to strengthen its economy.

  • Ghana’s economy is in a much better place – IMF

    Ghana’s economy is in a much better place – IMF

    Ghana, which has received a $3 billion International Monetary Fund (IMF) support package, is currently in the midst of its inaugural program evaluation, scheduled to wrap up by November, according to the Managing Director of the IMF, Kristalina Georgieva.

    During a comprehensive interview, Georgieva expressed her positive outlook regarding Ghana’s economic advancements, highlighting a significant upturn in the country’s financial situation in the past month.

    Additionally, in her discussion, Kristalina Georgieva commented on the progress being made by Zambia and Ghana, both of which have experienced debt defaults, within their respective IMF programs.

    She also noted that while Tunisia doesn’t require a restructuring at this point, the country should take prompt actions to strengthen its economy.

    “Ghana is doing actually quite well. You have seen that their position has improved over the last month, the economy is in a much better place.

    “I would very much hope that we can have the disbursement,” she said referring to a $600 million tranche of IMF money that’s due to be disbursed in November. 

    “That is part of the confidence building that we are projecting,” she said regarding Ghana’s economic stability.

    In her broader comments, Georgieva underscored the importance of tackling unsustainable debt crises as a “high-priority” issue.

    She offered a defense of the G20 Common Framework for debt resolution, even in the face of criticism regarding its perceived slow response in providing relief to eligible nations.

    Georgieva noted that as more countries seek assistance, the process has become more streamlined, with Chad, Zambia, Sri Lanka, and Ghana all showcasing shorter timeframes for achieving progress.

    She highlighted specific examples, noting that Chad took 11 months from the initial staff-level agreement to financial assurances, Zambia accomplished this in nine months, Sri Lanka in six months, and Ghana in just five months.

    “I hear lots of people saying, oh this doesn’t work,” she said.

    “My question to them is, ok, you forget about it. What do you have instead?”

    In the meantime, the IMF Managing Director emphasized that Egypt’s precious reserves will continue to dwindle unless the country opts for another currency devaluation. She commended other measures that Egypt, the IMF’s second-largest borrower, has taken to address its struggling economy.

    Since early 2022, Egypt has devalued its currency three times, resulting in a nearly 50% depreciation against the US dollar.

    Georgieva argued that delaying another devaluation is only postponing the inevitable, and the longer Egypt refrains from taking this step, the more challenging the situation will become.

    “The sooner we can reach an agreement on the road map for this the better,” she said.

    “The issue here is very simple. Egypt would bleed reserves protecting the pound and neither the country nor overall the environment is such that this is desirable. That’s a problem that has to be solved.” 

    Egypt’s net international reserves experienced a decline last year, reaching their lowest point since 2017, before showing signs of stability in recent months and reaching $35 billion in September. However, this figure remains more than one-fifth lower than its peak in 2020.

    The decision to maintain the stability of the Egyptian pound has come at a cost, as it has led to a depletion of foreign exchange in the economy through a reduction in commercial banks’ net foreign assets. In August, these assets shrank by over 5%, reaching $13.1 billion, as calculated by HC Research based in Cairo.

    Nevertheless, Kristalina Georgieva mentioned that progress is being made in the IMF’s assessment under Egypt’s $3 billion rescue program.

    “In the last couple of days there have been some constructive engagements,” the IMF head said ahead of a speech she made in Abidjan, Ivory Coast.

    “There will be more systematic work of our team with Egypt. So stay tuned. Let’s see what would come out in the next weeks.”

    Egypt’s long-term foreign debt rating was downgraded late Thursday by Moody’s to Caa1 from B3, seven levels into junk.

    The ratings agency cited the government’s “worsening debt affordability trend and the persistence of foreign currency shortages in the face of increasing external debt service payments over the next two years.” 

    The economic situation in Tunisia, another North African country facing challenges, is not as severe as some others, but it still requires immediate attention to finalize the agreements related to a $1.9 billion rescue package from the IMF, according to Georgieva.

    A debt restructuring is not required as “they are not yet hanging at the cliff,” she said.

    Nevertheless “the sooner the country takes some measures to strengthen their fiscal position, to strengthen their overall economic performance the better.”

    Egypt and Tunisia are grappling with some of the highest bond yields globally, highlighting investor caution towards holding their debt. Egypt’s dollar notes yield an average of 18.5%, as per Bloomberg indexes, while a Tunisian bond maturing in 2025 is trading at a yield of over 40%.

    Moving to the southern part of the continent, Zambia and Ghana, both countries that have experienced debt defaults, are in line to receive additional support, as stated by Georgieva.

    She noted that a memorandum of understanding with Zambia’s bilateral creditors has been tentatively agreed upon and will be signed once a few remaining details are resolved.

    Additionally, in recognition of the challenges faced by many of the world’s poorest nations in repaying debt, Georgieva expressed her support for the concept of suspending debt payments when countries are hit by climate-related disasters.

    “I’m very much in favour of including clauses in debt, be it bonds or loans, that put debt service suspension in place. So if a natural disaster happens, the country is not forced to choose between saving lives and paying creditors,” she said.

    “We all need to think about how we go about debt service in a world of more frequent and devastating climate disasters.”

  • IMF reluctant to approve Ghana’s second US$600 million bailout – Bright Simons

    IMF reluctant to approve Ghana’s second US$600 million bailout – Bright Simons

    The Vice President of IMANI-Africa, a policy think tank, Bright Simons, said that the government is having difficulty getting approval from an IMF team visiting the country for the second portion of a $3 billion loan that was agreed upon earlier this year.

    Simon claimed in a tweet that the situation was getting worse because of arguments between the governor of the Bank of Ghana and lawmakers from the opposition. These lawmakers want Governor Ernest Addison and his deputies to step down because they believe the bank is being poorly managed.

    The argument between the Central Bank governor of Ghana and the Opposition MPs, who he calls ‘hooligans,’ happened at a very bad time. The government is having trouble getting the IMF to approve the $600 million payment before they leave. This doesn’t make things easier, the person wrote on X (formerly Twitter).

    The meeting was taking place during the protest, so the governor sent the director in charge of security from the Board of Governors to collect the opposition’s petition.

    The Members of Parliament (MPs) refused the representative because they wanted to personally give the petition to the governor. The director had explained that Addison and his deputies were in a meeting with the IMF team at that time.

    The Governor criticized the opposition MPs for their recent protest and called it “completely unnecessary”. The protest happened on October 3, 2023, and the MPs were demanding resignation.

    He said he would not quit like the Minority MPs want him to.

  • If you give more money to government, they will squander it – Asiedu Nketia to IMF

    Chairman of the National Democratic Congress (NDC), Johnson Asiedu Nketiah, has entreated the International Monetary Fund (IMF) to desist from providing loans to the current government.

    He alleges that loans procured by the Akufo-Addo government are being squandered and not used for the intended purpose.

    Mr Asiedu Nketiah made the comment when he addressed the hundreds of individuals who participated in the #OccupyBoG protest that was held today, October 3.

    “His government is corrupt. Today, some NPP members say the part is corrupt. Don’t insult such people for there is more we haven’t heard. So we need to encourage them to reveal the information.

    “We won’t go to IMF again. We have come to tell you to leave your position but you have run, going to meet the IMF. We are telling the IMF that the people they are engaging are not representing Ghanaians, they are thieves. If you give them any money, they will squander it,” he said.

    During the protest, it was made public that the government was in talks with the IMF over its $3 billion deal. The Bank of Ghana Governor, Dr Ernest Addison, could not receive the petition by the protestors as he was in a meeting with the Fund.

  • Govt turned to IMF because Akufo-Addo’s economy was falling – Alan Kyerematen

    Former Trade and Industry Minister Alan Kwadwo Kyerematen stated that Ghana had no choice but to seek assistance from the International Monetary Fund.

    He claims that because Ghana’s debt levels had surged and the country’s international reserves at the Central Bank were depleted, it was critical that the country have some cushion.

    “We went to the IMF, and they agreed to have a package of support for us. Part of the condition was for us to reduce our debt-to-GDP ratio from 105% to 55%. The condition to expect from you to be able to enjoy a bailout is for you to bring your debt to sustainable levels.

    It was clear that as a country, we had overextended ourselves. However, if we had prioritized my recommendations for industrialization and the kinds of things I’m talking about today in my GTP, we would have laid the groundwork for a resilient economy,” he remarked.

    Alan Kyerematen admitted that the Russian-Ukraine war and COVID-19 have long-term consequences for Ghana’s economy.

    “These two external factors exposed the structural vulnerabilities in our economy. There are matured economies that suffered the impact of the same external shocks but were able to deal with the shock much better because they have resilient economies.

    “In our case the fact that we are not exporting enough and producing enough, the fact that we end up importing all the things we can produce in this country creates a certain challenge for our economy to withstand external shocks.”

  • Ghana, IMF nearing deal on debt restructuring

    The IMF expects Ghanaian authorities and the Official Creditor Committee to reach an agreement soon.

    According to Julie Kozack, the IMF’s Director of Communications, it is critical for Ghana to complete debt restructuring talks with both domestic and external creditors.

    “The next steps on debt restructuring are for the Official Creditor Committee to agree with the authorities on the specific modalities of debt relief and for the authorities to continue to engage with their external private creditors for relief on their external debt. These discussions are ongoing, and we hope that the OCC, the Official Creditor Committee, and the Ghanaian authorities will find an agreement soon. The government has recently finalized the restructuring of its domestic debt,” Julie Kozack said.

    Over half of Ghana’s total debt, which includes Eurobond obligations, is attributed to external creditors, totaling approximately $52.3 billion. This underscores the vital need for the country to ensure the sustainability of its debt.

    Despite being formed in May 2023, the creditor committee has not yet reached definitive decisions regarding the extent of debt reductions (haircuts) to be offered to Ghana.

    Meanwhile, an IMF delegation is presently in Ghana, evaluating the nation’s economic performance. They are also preparing a report that will determine Ghana’s eligibility for the next installment of the $3 billion loan.

    Ghana’s debt owed to external creditors makes up more than half of the country’s total debts, including Eurobond holders.

    External debts add up to about $52.3 billion of the country’s total debts, making it a necessary requirement for the country to make its debts sustainable.

    The creditor committee, which was formed in May 2023, is however yet to reach concrete conclusions on how much haircuts to give Ghana.

    However, an IMF team is currently in Ghana to assess the country’s performance and also to present a report to qualify the country for the next tranche of the $3 billion loan.

  • IMF pushes govt to seek debt relief from foreign creditors before next bailout tranche

    The International Monetary Fund (IMF) is nudging the Ghanaian government to reach an agreement on external debt restructuring with the Official Creditor Committee.

    Director of Communications at the IMF, Julie Kozack, noted during a press conference that the agreement must be done within the shortest possible time as discussions are ongoing.

    “The next steps on debt restructuring are for the Official Creditor Committee to agree with the authorities on the specific modalities of debt relief and for the authorities to continue to engage with their external private creditors for relief on their external debt. These discussions are ongoing, and we hope that the OCC, the Official Creditor Committee, and the Ghanaian authorities will find an agreement soon. The government has recently finalized the restructuring of its domestic debt”, Julie Kozack said.

    Ghana’s total debt, which amounts to $52.3 billion, has over half of it owned by external creditors, including Eurobond holders and certain banks. Consequently, a substantial reduction from external creditors is seen as crucial for the country’s efforts to significantly reduce its debt burden.

    Both UK-based Fitch Solutions and the Economist Intelligence Unit (EIU) share the belief that Ghana will reach an agreement with the Official Creditor Committee by the end of the year, paving the way for the commencement of external debt restructuring.

    An IMF Mission is presently in Accra, Ghana, to evaluate performance and engage in discussions regarding policies for the first review of the program. The objective is to present this review to the Executive Board in November 2023.

    Ghana’s program encompasses three key goals: restoring macroeconomic stability, ensuring the sustainability of debt, and establishing the groundwork for increased and more inclusive economic growth. The program includes a comprehensive set of reforms aimed at enhancing resilience while safeguarding the most vulnerable segments of the population.

    Regarding the sub-Saharan Africa region, Julie Kozack mentioned that the Fund will be publishing its regional economic outlook in the forthcoming weeks.

    “We will be releasing that outlook and that will contain detailed information on the region. I think it’s fair to say that the region is still undergoing what we called in April [2023] the big funding squeeze. The region has been very much affected by the succession of shocks, the pandemic, the cost of living crisis, food insecurity. And in addition, the region has been affected, of course, by tightening global financial conditions, and that has led to what we’re calling the funding squeeze”.

    “All of that has happened in a situation where the region is facing also, in some countries, high debt. So the challenges, of course, are very significant in Africa. But I would be remiss if I don’t also mention the opportunities in the sense that Africa is a continent with a youthful population, which presents tremendous opportunities for the region as well”.

  • IMF wants external debt restructuring agreement between Ghana and OCC done ‘soon’

    The International Monetary Fund (IMF) has reiterated its optimism regarding the possibility of the Official Creditor Committee and the Ghanaian government reaching an agreement on external debt restructuring in the near future.

    Ghana’s total debt, which amounts to $52.3 billion, has over half of it owned by external creditors, including Eurobond holders and certain banks. Consequently, a substantial reduction from external creditors is seen as crucial for the country’s efforts to significantly reduce its debt burden.

    During a press conference, Julie Kozack, Director of Communications at the IMF, emphasized the importance of the Ghanaian government finalizing the restructuring of its domestic debt.

    Both UK-based Fitch Solutions and the Economist Intelligence Unit (EIU) share the belief that Ghana will reach an agreement with the Official Creditor Committee by the end of the year, paving the way for the commencement of external debt restructuring.

    However, IMF wants the agreement done soon.

    “The next steps on debt restructuring are for the Official Creditor Committee to agree with the authorities on the specific modalities of debt relief and for the authorities to continue to engage with their external private creditors for relief on their external debt. These discussions are ongoing, and we hope that the OCC, the Official Creditor Committee, and the Ghanaian authorities will find an agreement soon. The government has recently finalized the restructuring of its domestic debt”, Julie Kozack said.

    Madam Kozack also mentioned that an IMF Mission is presently in Accra, Ghana, to evaluate performance and engage in discussions regarding policies for the first review of the program. The objective is to present this review to the Executive Board in November 2023.

    Ghana’s program encompasses three key goals: restoring macroeconomic stability, ensuring the sustainability of debt, and establishing the groundwork for increased and more inclusive economic growth. The program includes a comprehensive set of reforms aimed at enhancing resilience while safeguarding the most vulnerable segments of the population.

    Regarding the sub-Saharan Africa region, Julie Kozack mentioned that the Fund will be publishing its regional economic outlook in the forthcoming weeks.

    “We will be releasing that outlook and that will contain detailed information on the region. I think it’s fair to say that the region is still undergoing what we called in April [2023] the big funding squeeze. The region has been very much affected by the succession of shocks, the pandemic, the cost of living crisis, food insecurity. And in addition, the region has been affected, of course, by tightening global financial conditions, and that has led to what we’re calling the funding squeeze”.

    “All of that has happened in a situation where the region is facing also, in some countries, high debt. So the challenges, of course, are very significant in Africa. But I would be remiss if I don’t also mention the opportunities in the sense that Africa is a continent with a youthful population, which presents tremendous opportunities for the region as well”.

  • Effectiveness of IMF program evident in economic indicators – BoG

    Effectiveness of IMF program evident in economic indicators – BoG

    The Bank of Ghana has affirmed that Ghana’s International Monetary Fund (IMF) program is delivering positive outcomes, citing improved economic indicators in recent months.

    Dr. Ernest Addison, the Governor, highlighted positive trends in factors such as the exchange rate and inflation during a press briefing by the Monetary Policy Committee on September 25, 2023. He stated, “The Committee has noted the overall improvement in domestic macroeconomic conditions, with robust economic growth and a decrease in inflation in August.

    These developments indicate that the policy framework established under the three-year IMF Extended Credit Facility is starting to show results.”

    “Economic activity is rebounding strongly, the exchange rate is stabilising, inflation is declining, and the level of foreign exchange reserves has improved. Sustained improvement in these indicators should result in the restoration of real incomes and purchasing power,” he said.

    Ghana anticipates the arrival of the second portion of the IMF loan by year-end, according to the Governor. He emphasized that “During the final quarter of the year, reserve buildup will be reinforced by anticipated funds from the cocoa syndication loan, the second installment of the IMF ECF program, and additional multilateral inflows.”

  • Ghana still most indebted nation in Africa to the IMF – Report

    Ghana still most indebted nation in Africa to the IMF – Report

    Ghana maintains its leading position among African nations as the most indebted country to the International Monetary Fund (IMF).

    This ranking is the result of a significant increase in Ghana’s loans from the IMF, which surged by 35.3 percent in the second quarter of 2023.

    The IMF’s Quarterly Finances report for July 2023 revealed that Ghana’s outstanding loans to the institution were valued at Special Drawing Rights (SDR) 1.689 billion as of July 31, 2023, equivalent to approximately $2.227 billion.

    This latest figure represents an increase of $451 million in SDR compared to the previous figure of 1.246 billion SDR recorded as of April 30, 2023.

    Ghana’s engagement with the IMF began in July 2022, and after meeting the stipulated conditions for a bailout package, the IMF disbursed the first tranche of $600 million in June 2023. This disbursement aimed to address Ghana’s balance of payments position and restore macroeconomic stability.

    The IMF report also noted that Ghana’s outstanding loans represent 9.55 percent of Africa’s total, which amounts to SDR 17.68 billion. However, Ghana has repaid approximately SDR 8 million, equivalent to $10.55 million, to the IMF.

    Despite its loan exposure, the IMF categorizes Ghana’s position as concessional lending with low-interest financing terms.

    In the ranking of African countries most indebted to the IMF, the Democratic Republic of Congo follows Ghana, owing SDR 1.142 billion, while Kenya holds the third position with outstanding loans of SDR 1.008 billion as of July 31, 2023.

    Both countries have received loan disbursements from the IMF to support their balance of payments positions, with the DR Congo receiving SDR 153 million and Kenya receiving SDR 77 million.

  • Ghana to invest $33m into lithium mine

    Ghana to invest $33m into lithium mine

    Ghana’s sovereign wealth fund is set to make a substantial investment of nearly $33 million into a local lithium mine and acquire a minority interest in Atlantic Lithium, the company announced on Friday.

    The Minerals Income Investment Fund (MIIF) of Ghana will procure a 6% ownership stake in Atlantic Lithium’s various projects within the country, which notably includes the Ewoyaa mine, expected to become Ghana’s inaugural lithium-producing facility. The investment amounts to $27.9 million, according to Atlantic Lithium’s official statement.

    This move underscores the growing trend of heightened interest in companies involved in the production of critical electric vehicle battery materials, driven by the global shift toward clean energy solutions.

    Additionally, MIIF will secure a 3.05% ownership stake in Atlantic Lithium for $5 million. This agreement also grants MIIF the opportunity to compete for the supply contract of lithium produced by the Ewoyaa project through a competitive bidding process.

    “There is a competitive process (for the offtake) which MIIF will also participate in, but on a commercial level,” said Atlantic Lithium chairman Neil Herbert.

    “There is an open field of chemical converters, OEMs and major trading groups,” he said.

  • IMF delegation to evaluate Ghana’s Economic Recovery Program

    IMF delegation to evaluate Ghana’s Economic Recovery Program

    A delegation of International Monetary Fund (IMF) staff members is set to visit Ghana starting on September 25 and continuing into the first week of October. Their purpose is to assess the advancements made in Ghana’s Economic Recovery Programme.

    This visit signifies the second evaluation conducted by the IMF following the approval of Ghana’s financial assistance program on May 17. The review will assess the achievements of the targets established under the $3 billion three-year extended credit facility.

    Finance Minister Ken Ofori-Atta has expressed the government’s optimism regarding the receipt of the second installment of IMF bailout funds in December. This infusion of funds is expected to strengthen the government’s balance of payments.

    Speaking at the 3rd GIPC CEO’s Breakfast Meeting in Accra, Ofori-Atta stated, “The IMF team will be in Ghana from September 25th through the beginning of October. Hopefully, we will achieve a staff-level agreement during their visit, paving the way for a board meeting in November this year.”

    He continued, “I believe that the mission in September will allow us to reach a successful staff-level agreement, strengthening our negotiating position.”

    Additionally, Ofori-Atta has reconfirmed that Ghana is poised to receive the second installment of the IMF bailout funds in December. This disbursement will serve as vital support for the government’s balance of payments throughout 2023 and 2024.

    According to the June 2023 summary of the Economic and Financial Stability Report by the Bank of Ghana, the balance of payments exhibited a deficit of $107.8 million at the end of June 2023, approximately 0.1% of GDP. It is noteworthy that this deficit is markedly lower than the one recorded during the same period in 2022.

    Our forex bureau rates are provided by Afriswap Bureau De Change in Osu, Accra.

  • Second tranche of $3bn IMF deal to hit Ghana in December – Finance Minister

    Second tranche of $3bn IMF deal to hit Ghana in December – Finance Minister

    Finance Minister Ken Ofori-Atta has stated that Ghana is on course to receive the second installment of the IMF bailout funds in December, aimed at bolstering the government’s balance of payments for the years 2023 and 2024.

    Speaking at the 3rd GIPC-CEO breakfast meeting held in Accra, Mr. Ofori-Atta affirmed that the government is prepared for its initial review with the IMF scheduled for November, as they anticipate the arrival of the second tranche of $600 million.

    “We are ready for the mission that comes at the end of September so that we can try and get the staff level agreement, while the mission is here, and then we go to the board in November for the release of the 2nd tranche which will be $600 million. In addition to that, there are certain things we need to do with the World Bank so that we can get our DPO, which will be another $300 million. I believe that we are on course to maybe get a billion dollars to support Bank of Ghana’s balance of payment issues.”

    He also expressed optimism about finalizing discussions with the Paris Club and its bilateral creditors by the end of this year.

    In May 2023, Ghana received the initial portion of its $3 billion bailout package from the International Monetary Fund (IMF). This three-year extended credit facility was intended to resuscitate the country’s struggling economy.

    However, in August 2023, the International Monetary Fund (IMF) issued a caution to the Bank of Ghana, underscoring the importance of adhering to its policy mandates despite the financial challenges experienced in the fiscal year ending in 2022. The IMF stressed the necessity for the central bank to implement decisive measures to steer inflation back towards its targeted rate of 8 percent.

    “The loss the BoG incurred in the process has contributed to reducing its net equity to a negative value. Importantly, however, this does not prevent the BoG from fulfilling its policy mandates and ensuring inflation gradually returns towards its 8-percent target”, the IMF said in a press release.

    Nonetheless, the IMF has endorsed the Bank of Ghana’s GHS 60 billion loss, asserting that the impairment, a result of the government’s Domestic Debt Exchange (DDE), was imperative to “reestablish macroeconomic stability and public sustainability.”

    According to the Bank of Ghana’s June 2023 Economic and Financial Stability Report, the country’s balance of payments at the end of June 2023 registered a deficit of $107.8 million, equivalent to about 0.1% of GDP. This deficit is notably lower than the one recorded during the same period in the previous year.

  • No request was made by IMF for us to bring back quarterly adjustments – PURC

    No request was made by IMF for us to bring back quarterly adjustments – PURC

    Executive Secretary of the Public Utilities and Regulatory Commission, Dr. Ishmael Ackah, has clarified that the quarterly adjustments conducted by the Commission were not a requirement set by the International Monetary Fund (IMF) to obtain the $3 billion loan.

    He explained that these adjustments were already in place, but their implementation had not been consistent.

    Consequently, the IMF’s directive was centered on ensuring the Commission’s consistent application of these adjustments and the collection of reviewed rates.

     “We used to have what was called automatic adjustment but now it is called quarterly adjustment.

    “The IMF is not asking us to bring the quarterly adjustment back, no. We have it and it’s published on our website. But what they are saying is that in order not to build debt in the sector, PURC should be consistent in implementing it, so that if there are any financial gaps when we implement it, at least it helps to pay, and we won’t go into 2025 saying energy sector debt is this, and government may have to introduce taxes and so many other things,” he told JoyNews.

    “Consistency helps to reduce the debt,” he added.

    The Executive Secretary emphasized that even though IMF conditionalities remain in place, they are taking Ghanaians’ welfare into account.

    “IMF is in town but look at June, we should have done 27% but the Board decided that that will be too much so why don’t we take 450 million out of the 27% that brought the tariff to 18% and that was what we adjusted with.

    “So yes, the IMF is there, the World Bank is there but we also looked at the welfare of the Ghanaian. Yes, we don’t have to build debt, but we can’t also kill Ghanaians, so the IMF is a factor but we made the decision even before that,” Dr. Ackah said.

  • IMF lauds BoG for tightening of monetary policy

    IMF lauds BoG for tightening of monetary policy

    The Resident Representative of the International Monetary Fund (IMF) in Ghana, Dr. Leandro Medina, has expressed his approval of the Bank of Ghana’s (BoG) decision to adopt a stricter monetary policy stance and eliminate the practice of financing the budget through monetary means.

    He noted that both the government and the IMF team have reached a consensus on the importance of prioritizing the avoidance of monetary financing for the budget.

    “In fact, the authorities, under the IMF-supported programme, have decided to eliminate such financing; and they intend to strengthen the BoG Act to tighten the conditions under which such financing is allowed. That said, looking at 2022, we need to remember that the economy faced unprecedented challenges”, he told an Accra based newspaper.

    “The large budget deficit could not be financed anymore as the government had lost access to both international and domestic capital markets. Under these circumstances, the choice was between BoG providing crucial financing to enable the government to meet its obligations or a very disruptive and possibly much more abrupt crisis”, he explained.

    In reference to the impact of the Domestic Debt Restructuring on the balance sheet of the Bank of Ghana (BoG), Dr. Medina emphasized that the restructuring of the nation’s debt constitutes a crucial component of the government’s strategy to reestablish macroeconomic stability and ensure the sustainability of public debt.

    “And BoG participated in the restructuring to share some of the burden the domestic debt exchange places on government debt holders, along with banks, other financial institutions, pension funds and individuals. Indeed, this contributed to reducing its net equity to a negative value, but crucially, we conducted analysis that indicated that this situation does not hinder the BoG from effectively executing its policy mandates, including the vital task of guiding inflation back to its 8-percent target in a gradual manner”.

    In essence, his conclusion points towards an anticipated improvement in the net equity of the Bank of Ghana (BoG) over the course of time, leading to an eventual return to a positive financial position.

  • Sammi Awuku reveals IMF surprised by Ghana’s economic recovery

    Sammi Awuku reveals IMF surprised by Ghana’s economic recovery

    The Director-General of the National Lotteries Authority, Sammi Awuku, has expressed his approval of the actions undertaken by the Akufo-Addo administration to rejuvenate the struggling Ghanaian economy. Awuku commends the government’s implementation of significant measures, which he believes will yield positive results in the near future.

    During an appearance on Metro TV’s Good Evening Ghana program on Tuesday, August 22, the former National Organiser of the New Patriotic Party noted that even the International Monetary Fund (IMF) has been impressed by the country’s economic recovery efforts. Despite acknowledging the current difficulties, Awuku, who now leads the NLA, is optimistic about the days ahead, asserting that brighter times are on the horizon.

    Awuku passionately encouraged Ghanaians to rally behind the government’s efforts in order to facilitate the restoration of the economy, ultimately benefiting the entire nation.

    “We have to celebrate our modest success story which became the toast of the world. But now post Covid-19, the IMF itself is shocked at Ghana’s economy recovery. It’s been faster than they expected.”

    “So these builders of the economy I am confident that they will be able to take us through these difficult moments that we find ourselves,” he said. 

    President Akufo-Addo received accolades from Mr. Awuku for acknowledging the difficult circumstances in which the nation finds itself.

    He claimed that was the sign of a moral and trustworthy leader.

  • You cannot blame BoG for being forced into DDEP – John Kwakye

    You cannot blame BoG for being forced into DDEP – John Kwakye


    The Director of Research at the Institute of Economic Affairs (IEA), John Kwakye, says the Bank of Ghana (BoG) cannot be faulted for being forced into the government’s Domestic Debt Exchange Programme (DDEP), which resulted in the central bank’s 2022 financial loss.

    He admitted that the BoG should be blamed for over-lending to the government, but insisted that the central bank cannot be faulted for taking a “haircut.”

    The BoG recorded a staggering loss of GH60.8 billion within the 2022 fiscal year.

    The Minority in Parliament has on a number of occasions called on the Governor of the Bank of Ghana, Dr Ernest Addison, and his deputies to resign for being reckless in the management of the central bank.

    Speaking on the Point of View on Citi TV, hosted by Bernard Avle, the Director of Research at IEA, he stated, “As central bankers, financing the government’s deficit is the most inflationary thing to do. That is why the central banks set lending limits for their governments.

    “What has happened in our case [BoG] is that it looks like BoG went far beyond the sealing Act of last year’s revenue of 5%. We are told that they lent almost GH44 billion, and that is the magnitude. Once you do that, you are already getting yourself into serious trouble.”

    “BoG over-lent to the government, and then you bring in this DDEP, which qualifies us for the IMF programme, and the IMF compels BoG to be part of it. Out of the GH60.8 billion loss they have declared, GH53.1 billion is coming directly from DDEP. So the question is, will you fault them for that?

    “We can fault them for over-lending to the government; that is the problem, but why they were being forced to be part of the DDEP is also another. That one, you can’t fault them for that”.

    He further took a dig at the IMF for forcing the BoG to be part of the DDEP in order to secure the $3 billion bailout.

    “I also have a problem, why did the IMF force our central bank to be part of the DDEP? Just because they wanted us to meet the requirement for the ECF”.

    According to him, the government should rather be blamed for the loss incurred by the BoG for failing to cut down on its expenditure.

    “The blame, I think, should be at all various levels, first the government for causing all these deficits, which require some financing. We have been calling on the government to try to live within its means,”.

  • Finish old ones, but don’t start new ones – IMF,EU orders COCOBOD to quit road projects

    Finish old ones, but don’t start new ones – IMF,EU orders COCOBOD to quit road projects

    The Ghana Cocoa Board (COCOBOD) has announced its intention to cease the construction of cocoa roads after the current ongoing projects are concluded.

    COCOBOD had launched the Cocoa Road Programme with the aim of addressing transportation challenges related to delivering agro-inputs to cocoa farmers and facilitating the evacuation of cocoa beans.

    Joseph Boahen Aidoo, the CEO, revealed during the 50th Anniversary Celebration Symposium of the Cocoa Clinic that this change in policy is a result of discussions with the European Union and the International Monetary Fund (IMF).

    Both of these entities, he explained, had raised questions about COCOBOD’s involvement in road construction and suggested a focus on its core functions instead.

    “The EU sent a team last year to do due diligence on sustainable production and when they came, they wanted to know why COCOBOD was involved in cocoa roads construction because it is not a core business of COCOBOD, and they insisted that we take that venture out of our equation; and, of course, the IMF is also saying the same thing”.

    “They say that we can continue with what we are currently constructing and not start new ones”, Mr Boahen said.

    In order to improve farmers’ access to healthcare, he also described plans for building healthcare facilities in cocoa-growing areas, noting instances of farmers having to travel far for care as motivation.

    “I have had the experience where a woman, who was in labour and couldn’t deliver, had to be carried in a hammock and travelled over 28 kilometres and couldn’t survive.

    “And, when we look at the countryside to see how our cocoa farmers struggle to access health delivery, you will be touched to do something; and that is why, as an institution, it is important to bring health services and facilities as close to these farmers as possible”.

  • EU, IMF directs COCOBOD to halt road projects

    EU, IMF directs COCOBOD to halt road projects

    Ghana Cocoa Board (COCOBOD) has announced its intention to cease the construction of cocoa roads after the ongoing projects are finished.

    The Cocoa Road Programme was launched by COCOBOD with the aim of resolving transportation difficulties related to delivering agricultural inputs to cocoa farmers and streamlining the evacuation of cocoa beans.

    During the 50th Anniversary Celebration symposium of the Cocoa Clinic, CEO Joseph Boahen Aidoo conveyed that this change in policy originates from discussions held with the European Union and the International Monetary Fund (IMF).

    Both entities, he said, questioned COCOBOD’s involvement in road construction, urging a focus on core functions.

    “The EU sent a team last year to do due diligence on sustainable production and when they came, they wanted to know why COCOBOD was involved in cocoa roads construction because it is not a core business of COCOBOD, and they insisted that we take that venture out of our equation; and, of course, the IMF is also saying the same thing”.

    “They say that we can continue with what we are currently constructing and not start new ones”, Mr Boahen said.

    He also outlined plans for establishing healthcare centres in cocoa-growing communities to enhance medical accessibility for farmers, citing instances of arduous journeys for healthcare as a driving factor.

    “I have had the experience where a woman, who was in labour and couldn’t deliver, had to be carried in a hammock and travelled over 28 kilometres and couldn’t survive.

    “And, when we look at the countryside to see how our cocoa farmers struggle to access health delivery, you will be touched to do something; and that is why, as an institution, it is important to bring health services and facilities as closer to these farmers as possible”.

  • How World Bank, IMF stopped gov’t from re-structuring it $8.8bn loan to Ghana

    How World Bank, IMF stopped gov’t from re-structuring it $8.8bn loan to Ghana

    Finance lecturer and economist, Professor Godfred Bokpin, known for his insightful perspectives, has offered a detailed account of how the World Bank and International Monetary Fund (IMF) intervened to prevent the Ghanaian government’s proposed $8.8 billion loan restructuring some years back. 

    Speaking on Peace FM’s morning show, Pro Bopkin recounted that nearly two decades ago, in 2002, the World Bank and IMF intervened to halt the government of Ghana’s efforts to restructure its debt. 

    “The total external debt of Ghana at the end of 2002 was US$30.5billion. Out of this, the multilateral debt, which refers to the amount Ghana owes the World Bank, IMF and other external institutions, was around US$8.8billion. And do you know what the IMF did? They said they are Lenders of Last Resort and so their debt is not up for restructuring and so the haircut did not affect them. They managed to protect their balance sheet,” he said.  

    He noted that these levels of losses seriously incapacitate the Central Bank from performing its functions. 

  • Construction of new cocoa roads to be put on hold – COCOBOD

    Construction of new cocoa roads to be put on hold – COCOBOD

    The Ghana Cocoa Board (COCOBOD) has declared that it will cease its involvement in the construction of cocoa roads nationwide once the ongoing projects are completed.

    Initially launched to address the logistical difficulties in supplying agro-inputs to cocoa farmers and transporting cocoa beans to Take Over Centres, the Cocoa Road Programme by COCOBOD is undergoing a shift in policy.

    Speaking at the 50th Anniversary Celebration symposium of the Cocoa Clinic, the CEO of COCOBOD, Joseph Boahen Aidoo, revealed that this change is the outcome of negotiations with the European Union and the International Monetary Fund (IMF).

    “Last year, the EU conducted a thorough examination of sustainable production practices. During their assessment, they raised questions about COCOBOD’s involvement in cocoa road construction, citing that it falls outside our core responsibilities. The IMF has expressed similar sentiments. Both entities recommend that we focus on our ongoing construction projects and refrain from initiating new ones.”

    Nonetheless, Joseph Boahen Aidoo also unveiled COCOBOD’s intention to establish healthcare facilities within various cocoa-growing communities across the nation, aimed at enhancing healthcare accessibility for cocoa farmers.

    “I have personally witnessed the plight of a woman in labor, unable to give birth, being transported over 28 kilometers in a hammock, ultimately leading to a tragic outcome. Observing the challenges our cocoa farmers endure to access healthcare in rural areas has spurred us to take action. As an organization, we recognize the importance of bringing healthcare services and facilities as close as possible to these farmers.”

  • IMF’s comments regarding BoG’s GH60 billion DDEP-related loss

    IMF’s comments regarding BoG’s GH60 billion DDEP-related loss

    The GH60 billion impairment loss reported by the Bank of Ghana in the 2022 fiscal year has been supported by the International Monetary Fund (IMF).

    There is no need for concern, the Bretton Woods institution stated in a post regarding Ghana that was retrieved from its website on August 10, 2023.

    It upheld the claim that the Bank of Ghana experienced losses as a result of its involvement in the government’s Domestic Debt Exchange Programme (DDEP), which is a part of initiatives to address the sustainability of debt and restore macroeconomic stability.

    However, the IMF urged the Bank of Ghana to uphold its policy directives and take strict action to bring inflation under control and back to its predetermined objective of 8%.

    Below is what the IMF said about BoG’s impairment loss in 2022

    Why did the Bank of Ghana 36+ (BoG) incur losses from the authorities’ domestic debt exchange and what are their implications?

    The Ghanaian authorities’ domestic debt exchange (DDE) is a key element of their plan to restore macroeconomic stability and public debt sustainability. The BoG is participating in the DDE to share some of the burden the DDE places on government debt holders, along with banks, other financial institutions, pension funds and individuals.

    The loss the BoG incurred in the process has contributed to reducing its net equity to a negative value. Importantly, however, this does not prevent the BoG from fulfilling its policy mandates and ensuring inflation gradually returns toward its 8-percent target. Indeed, central bank income is expected to be sufficient to cover monetary policy operational costs. The BoG’s net equity is expected to improve significantly over time and eventually return to positive territory.

  • FULL TEXT: BoG reacts to 2022 financial statements

    FULL TEXT: BoG reacts to 2022 financial statements

    Bank of Ghana released its full-year 2022 audited financial statements on July 28, 2023. The financial statements reported a total loss of GHS 60 billion, which has since become a matter of unfortunate politicisation.

    It is noteworthy that GHS 53.1 billion of those losses were a direct result of the Government’s domestic debt restructuring exercise (phases 1 and II).

    It is important to put the Bank of Ghana’s 2022 financial results in proper context with a clear statement of the problem that Ghana faced and the chronology of events in Ghana since 2019.

    There was a clear mismatch between revenue inflows and expenditure financed in 2020 by exceptional support from the IMF and World Bank resources, in addition to financing from the Bank of Ghana through the issuance of the GHS10 billion COVID-19 bond.

    As a result, sovereign spreads on Ghana bonds widened, signalling investor dissatisfaction with the stance of fiscal policy.

    The Budget for 2022, which was read in 2021, failed to address fiscal concerns as it was even more expansionary by about 23% with a raft of revenue measures to raise financing.

    As a result, the Credit Rating Agencies further downgraded Ghana’s sovereign debt rating, which blocked Ghana’s access to international capital market borrowing. This triggered a liquidity crisis, spilling over into a balance of payments crisis.

    External and domestic payments needed to be made, the domestic auction was failing, and the Bank of Ghana had to step in to arrest a major economic and social crisis. In 2 months, the Bank of Ghana lost US$500 million in reserves and built significant overdraft with the government as a result of the auction failures.

    It became clear that Ghana was on a path that was unsustainable, and the Government had to approach the IMF for support in July 2022. The IMF process included putting into place a credible programme of reform, which included restructuring of the total government debt to sustainable levels.

    Until Staff Level Agreement with the IMF was reached in December 2022, the Bank of Ghana had to continue to provide the necessary support to keep the economy running.

    In line with the provisions of the Bank of Ghana Act, (Act 612), as amended, the Bank informed the Minister of the developments in its finances. The Minister reported this to Parliament as part of his briefing to Parliament on the IMF programme and the Domestic Debt Exchange.

    A major plank of the corrective action required for the IMF programme was the Domestic Debt Exchange, where the stock of Government of Ghana debt was to be halved from 105% of GDP to 55% of GDP by 2028. The holders of Government debt had their debt instruments exchanged for new ones with lower interest payments and longer terms.

    Despite the losses inflicted on households and banks, the threshold of 55% of GDP was not met. The Bank of Ghana was used to close the gap to enable Ghana to meet the debt threshold that qualified Ghana for the IMF programme (Bank of Ghana therefore, acted as a loss absorber). This means the Bank of Ghana had to absorb a 50% haircut on its non- marketable holdings of Government debt instruments.

    This singular act led to significant impairment losses of GHS 32.3 billion to the Bank’s accounts. Impairments of marketable instruments also accounted for another GHS16.1 billion, bringing the total impairments of Government holdings to GHS48.4 billion.

    As experienced by central banks globally, price and exchange rate movements led to a loss of GHS5.2 billion, while impairments of Cocobod loans amounted to GHS4.7 billion. This is the reason the Bank of Ghana reported a loss of GHS 60 billion in 2022.

    Central banks are not commercial banks. This financial outcome has very little implication for the operations of the Bank of Ghana, as supported by evidence from other central banks. Technically, Central Banks cannot be insolvent or bankrupt.

    Bank of Ghana assures key stakeholders and the general public that we are committed to the highest standards of prudent management, governance, and transparent accounting and audit practices.

  • Tanzania’s adherence to the economic reform plan is lauded by the IMF

    Tanzania’s adherence to the economic reform plan is lauded by the IMF

    Deputy Managing Director of the International Monetary Fund (IMF), Bo Li, left Tanzania with a clear commitment to aiding the nation in achieving its full potential for growth.

    Mr. Bo commended Tanzanian officials for their efforts in carrying out the nation’s economic reform.

    “I commended the authorities’ commitment to preserving Tanzania’s macroeconomic stability in a challenging global environment,” he said in a statement on August 1.

    “The authorities’ swift policy response helped contain inflation and safeguard the economy against spillovers from the war in Ukraine.”

    The International Monetary Fund (IMF) has urged Tanzanian authorities to implement tax reforms to boost domestic revenue mobilization. This move would create the fiscal space necessary to finance social spending and priority investments, particularly in human capital, through increased spending on education and health.

    In April, the IMF completed the first review of the Extended Credit Facility (ECF) program, resulting in the release of approximately $153 million for budget support. With this disbursement, Tanzania’s total access under the program reached around $304.7 million. The three-year program, amounting to $1.04 billion, was approved by the IMF board in July 2022, with an initial disbursement of about $151.7 million.

    Tanzania’s economic recovery from the pandemic has been affected by both spillovers from the war in Ukraine and domestic factors. Economic growth slowed to an estimated 4.7 percent in 2022 from 4.9 percent in 2021.

    However, the outlook for 2023 is more positive, with Tanzania’s economy expected to rebound to a growth rate of 5.2 percent. This recovery is attributed to the subsiding of global commodity price shocks and an improvement in the business environment.

  • Economy is showing signs of recovery – Ken Ofori-Atta

    Economy is showing signs of recovery – Ken Ofori-Atta

    Finance Minister, Ken Ofori-Atta has stated that Ghana’s economy is displaying encouraging signs of revival.

    The Minister made these remarks while delivering the 2023 Mid-Year Budget Review in Parliament on Monday, July 31, 2023. 

    “As I have indicated, we have made significant progress on restoring macroeconomic stability and the narrative is changing. The economy is showing signs of recovery,” he said.

    He noted that “the exchange rate has stabilised, inflation has softened, and interest rates have declined since December, 2022.”

    He explained to the House that the positive outcomes are a direct consequence of the dedicated execution of all the measures outlined in the 2023 Budget and the favorable sentiments stemming from the advancements made in the IMF Programme.

    “Mr. Speaker, these outturns are the result of focused implementation of all the measures we presented in the 2023 Budget and the positive sentiments arising from the progress with the IMF Programme, which I will now discuss,” he noted.

    The Mid-Year Budget Review is in accordance with Section 28 of the Public Financial Management Act, 2016 (Act 921). It serves as a crucial stepping stone, enabling the government to embark on a transformative economic agenda for the latter half of the year.

    Earlier, the Finance Ministry explained that this year’s Mid-Year Budget Review will lay out essential programmes and policies aimed at restoring macroeconomic stability, while propelling economic growth.

  • Ghana’s economy gradually recovering – Ofori-Atta

    Ghana’s economy gradually recovering – Ofori-Atta

    Finance Minister, Ken Ofori-Atta, has expressed optimism about the country’s economic recovery after facing recent challenges.

    He reported that the Ghanaian economy has shown positive signs over the past six months, and the government will not be seeking a supplementary budget.

    During the 2023 Mid-Year Budget Review presented in Parliament on July 31, Ken Ofori-Atta stated, “For the first six months of the year, we continue making progress to exceed our non-oil revenue targets for the year. We have seen improvements in non-oil tax revenue collection despite some noticeable shortfalls in VAT.”

    However, the Minister also acknowledged that oil revenues have fallen below expectations due to changes in global prices. As a result, the Finance Ministry will conduct a downward review of these targets and corresponding expenditures, particularly affecting the Annual Budget Funding Amount (ABFA).

    “However, oil revenues have fallen short of expectations due to changes in global prices.”

    “We will, therefore, undertake a downward review of the oil-related revenue as well as the corresponding expenditures to align with the under-performance of some of our revenue handles. Specifically, this will impact the Annual Budget Funding Amount (ABFA),” he added.

    Despite the challenges faced, Ken Ofori-Atta urged Ghanaians to support the government’s efforts to restore the country’s economy and improve the living conditions of citizens. The government remains determined to address the economic hardships promptly.

    The Finance Minister described 2022 as his toughest year in office, during which he had to make difficult yet necessary decisions to facilitate Ghana’s economic recovery.

    One significant decision was seeking a bailout from the International Monetary Fund (IMF) to implement the Post-COVID-19 Programme of Economic Growth (PC-PEG).

    At that time, the country was going through a period of economic uncertainties and despondency.

  • Economist dismisses Ghana’s 2025 recovery projection

    Economist dismisses Ghana’s 2025 recovery projection

    An economist, Dr. Ishmael Yamson, has expressed doubt that Ghana’s economy will recover in 2025, contrary to the prediction made by the World Bank.

    He believes that the government is ill-prepared to implement the necessary tough structural reforms recommended by the International Monetary Fund (IMF).

    Dr. Yamson also pointed out that the government lacks financial discipline and readiness to rationalize its spending.

    “Unless I see it happen, fine. But for now I don’t believe it will come to pass”, he doubted.

    Speaking to the media on July 27, 2023, Dr. Yamson emphasized that Ghana will need significant time to fully recover from the current economic challenges facing the country.

    He also mentioned that the projected recovery relies on external developments favoring the country and the successful implementation of potentially difficult programs by the government.

    The World Bank’s report titled “Price Surge: Unraveling Inflation’s Toll on Poverty and Food Security” projected that Ghana’s economy would recover to its full potential by 2025.

    The report suggested that economic growth may slow down in 2023 and 2024 but is expected to recover by 2025 due to fiscal consolidation fading and the effects of macroeconomic stabilization and structural reforms becoming evident.

    However, Dr. Yamson disagreed with the notion that the current economic challenges can be solely attributed to the COVID-19 pandemic and the Russia/Ukraine war.

    He argued that Ghana’s debt issues were present even before the Russia/Ukraine war began and criticized the government for not being prudent with its finances.

    The economist emphasized that Ghana’s current economic challenge is more related to excessive expenditure rather than a revenue issue.

    Over the years, the government has continued to spend even when the necessary resources were not available to finance these expenses.

    Dr. Yamson warned that expenditure control is especially critical during election years to avoid undue pressure on the economy.

    “We should not forget the projection also depends on external development’s favouring the country. In addition, government must also implement some programmes, which we all know may be difficult”, he said.

    Additionally, data from the Bank of Ghana indicated that funds outside the operations of commercial banks in the country increased significantly, raising concerns among some banking sector players. Dr. Yamson advised the Bank of Ghana to address this situation promptly.

    Furthermore, he expressed disappointment regarding former minister Cecilia Dapaah’s decision to hoard over a million dollars in her house, as it contradicted the government’s efforts to encourage savings in banks.

    This behavior is seen as worrisome and counterproductive to the government’s goal of promoting financial responsibility among the public.

    Overall, Dr. Yamson’s statements highlight the challenges faced by Ghana’s economy and underscore the need for sound financial management, structural reforms, and prudent fiscal practices to achieve sustainable growth and recovery.

  • Ghana’s economic woes blamed twice on IMF, World Bank

    Ghana’s economic woes blamed twice on IMF, World Bank

    The World Bank and the International Monetary Fund have been accused of idly watching as Ghana borrows to unsustainable levels.

    So far, there have been two accusations lodged. First, it was claimed that the World Bank participated actively in power purchasing agreements but only watched as the country negotiated several arrangements that were not in the country’s best interests.

    President of the policy think tank IMANI Africa, Franklin Cudjoe, claimed that while the World Bank is actively involved in Ghana’s energy sector recovery program, the Bank’s claim that a significant portion of the nation’s debt originates from that sector is unfounded.

    In a post on June 5, 2023, he wrote “It is true that some take or pay power contracts signed by the NDC were very expensive. The current government set up committees to review them. However, the terms of these contracts were extended.

    “In effect, as ACEP’s Ben Boakye puts it, the same power plants the World Bank director complains about have been extended to long-term agreements without caution from the Bank”.

    The World Bank in Ghana has been a very active financial supporter of Ghana’s Energy Sector Recovery Programme for the past four years. So, there you are,” he added.

    An Economist Dr. Yamson has also questioned the World Bank for not cautioning Ghana enough on reckless borrowing.

    ”I have always said that sometimes the Fund and the Bank have to share in the blame because they themselves don’t say it as it should be said. They were aware, long time, that the government was doing things that would push this country into a crisis.”

    “When we were borrowing literally every year were they not aware? All that they’ll put in their report is that excessive borrowing will lead you to debt distress, a simple sentence. And beyond that what else did they do? Did they say to government stop? Never,” he said.

  • IMF will fail if Ghana’s expenditure persists – Dr Yamson

    IMF will fail if Ghana’s expenditure persists – Dr Yamson

    An Economist, Dr. Ismael Yamsom, has urged government to exercise caution in its spending, as merely obtaining a loan from the International Monetary Fund (IMF) may not fully address the crisis it was intended to resolve.

    According to Dr. Yamsom, Ghana’s major challenge lies in its expenditures consistently exceeding its revenue, leading to financial difficulties.

    He emphasized that the government needs to take intentional measures during the mid-year budget review to demonstrate its commitment to reducing expenses.

    Dr. Yamsom expressed his opinion that the IMF should offer support in alignment with the government’s plans rather than imposing solutions and providing excessive assistance.

    “That’s why the fund is clever to say this programme is the authority’s programme and we are supporting it. So the IMF programme should only be a support to what our government should do and must do. And for me what is the problem?

    “The problem has always been that we spend more than we raise in revenue. So let the government demonstrate in its budget on Monday that truly it is going to take steps, clear steps, credible steps, that it will cut expenditure and that it can be quantifiable, verifiable, and that we can all track it.

    “Because if we maintain the same expenditure levels then the IMF programme can go sleep. Because you’ll give me one billion a year, how much debt and interest is government paying every year?” he was quoted by myjoyonline.com.

  • Economist partly blames World Bank, IMF for Ghana’s economic crisis

    Economist partly blames World Bank, IMF for Ghana’s economic crisis

    An economist, Dr. Ishmael Yamson, has attributed part of Ghana’s current economic situation to the World Bank and the International Monetary Fund (IMF).

    He criticized these Bretton-Wood institutions for not intervening when the government engaged in excessive borrowing without repercussions.

    According to him, although the annual reports from these institutions warned of potential debt distress, mere warnings were insufficient. Instead, he argued that they should have taken a more assertive stance by threatening to impose sanctions if the government did not heed their warnings.

    Dr. Yamson stated that the failure of the World Bank and IMF to effectively exercise their oversight role on the country’s economy has contributed to the nation’s current debt distress situation.

    “I have always said that sometimes the Fund and the Bank have to share in the blame because they themselves don’t say it as it should be said,” Dr. Yamson said on PM Express Business Edition.

    “They were aware, long time, that the government was doing things that would push this country into a crisis. And I can tell you that the crisis that we have today I haven’t seen it all my life in this country. Never. If you go back and look at the statistics, here’s nothing like this before.

    “Yet, every year they issue the report and they say to government but they’re not firm enough to say ‘look, we can see the trend taking you this way and we will apply sanctions if there are any such things.’

    “But I believe that the Fund and the Bank have a greater responsibility also to themselves because I know they don’t want Ghana to fail. And if they don’t want Ghana to fail then they must behave in a way that pushes Ghanaian government. I mean why?

    “When we were borrowing literally every year were they not aware? All that they’ll put in their report is that the excessive borrowing will lead you to debt distress, simple sentence. And beyond that what else did they do? Did they say to government stop? Never,” he said.

  • Ghana didn’t need an IMF bailout with such money in Cecilia Dapaah’s house – MP

    Ghana didn’t need an IMF bailout with such money in Cecilia Dapaah’s house – MP

    Member of Parliament for Kumbungu, Professor Hamza Adam, has raised eyebrows by questioning the necessity of an IMF bailout when a substantial sum of money has been discovered in the house of Cecilia Dapaah, the current Minister for Sanitation and Water Resources.

    The revelations have sparked a heated debate among the public, demanding further scrutiny into the financial affairs of government officials.

    Making a submission on the matter, Prof Adam, said under the laws of the state, it is illegal to retain an amount of money exceeding a specific threshold within one’s residence.

    It is alleged that Madam Cecilia Dapaah had in her possession $1 million, €300,000, and an undisclosed amount of Ghana Cedis at her residence.

    These monies were allegedly stolen by two house helps, for which they are standing trial at an Accra Circuit Court.

    Speaking on this in an interview with the press in parliament on Friday, July 21, Prof Adam said “First of all it is illegal to keep certain money, at home particularly foreign. So an amount to the tune of millions will be shocking to the bone.

    “I will appeal to all the skakeholders who matter to investigate the matter so that we will get to the bottom of the issue because it is shocking if you look at the quantum of the amount that is alleged to be found at her residence. if we got such an amount of money we didn’t need to go to the IMF.”

    He added “That is also a wake-up call, which means we have to go down and investigate all ministers who are serving the country at the moment. What it simply means is that whereas everybody is dying that the stake is heating up and livelihoods are getting deteriorated others are sitting in gold mines. I am appealing to the stakeholders who matter to do further investigation.

    “I think it is important the minister, as a matter of urgency, relinquishes her position as the minister, the reason being that it may interfere with the investigation process otherwise the president must compel her to resign.”

  • Government’s two new ‘haircuts’ explained

    Government’s two new ‘haircuts’ explained

    As stated in the 2023 budget announcement, Ghana’s debt levels have reached unsustainable levels, posing challenges for the country to secure a bailout from the International Monetary Fund (IMF), leading to the necessity for debt restructuring.

    In December 2022, the government initiated a domestic debt exchange program, inviting bondholders to exchange their existing bonds for new ones with revised maturity dates. Despite facing strong opposition, a remarkable 85% of bondholders agreed to participate in the Invitation to Exchange.

    This accomplishment was crucial as it fulfilled one of the requirements set by the IMF. However, to secure the first tranche of the $3 billion loan from the IMF, the government needed to meet other conditions, including securing assurances from external creditors.

    Upon receiving the necessary assurance, the IMF’s Executive Board approved the first tranche of the loan in May.

    Now, in preparation for the second tranche, expected in November, the government has launched two additional debt restructuring programs, aiming to restructure bonds worth up to GH¢809 million.

    The domestic debt exchange program enables the government to call for bondholders to swap their current bonds for new ones with extended maturity dates. This approach is taken because the government faces challenges in meeting both principal and interest payments for bonds that have matured or are scheduled to mature this year.

    By extending the maturity dates and adjusting the interest rates for the new bonds, the government seeks to create a manageable repayment schedule and provide some breathing space to meet its payment obligations.

    The two new “haircuts” are for holders of dollar bonds and holders of COCOBOD’s short-term securities i.e., cocoa bills.

    See the invitations sent out by the government for the new haircuts below:

    COCOBOD’S INVITATION

    The Ghana Cocoa Board (COCOBOD) has, today, launched a debt securities exchange programme (the Exchange Programme) under which it is inviting holders of its short-term debt securities (the Cocoa Bills) to voluntarily offer to exchange their Cocoa Bills (representing an aggregate principal of approximately GHS 7.93 billion) for longer-term debt securities with averagely lower coupon rates to be issued by COCOBOD (the Bonds).

    The Bonds will be issued pursuant to the terms of (the Programme Documents):
    (a) an exchange memorandum dated 14 July 2023 (the Exchange Memorandum);
    (b) a trust deed dated 14 July 2023 and entered into between COCOBOD (as issuer) and Consolidated Bank Ghana Limited (CBG) (as trustee for the holders of the Bonds); and
    (c) an agency agreement dated 14 July 2023 and entered into by COCOBOD (as issuer), CBG (as bond trustee and paying bank), and the Central Securities Depository (GH) LTD (as transfer agent, calculation agent, and registrar in respect of the Bonds).

    Holders of the Cocoa Bills whose offers are accepted by COCOBOD will receive five (5) different Bonds with an aggregate principal amount (rounded down to the nearest GHS 1.00) equal to the principal amount of Cocoa Bills tendered (in addition to any accrued and unpaid interest due on such Cocoa Bills). The five (5) Bonds will mature on a one-per-year basis consecutively from (and including) 2024 to (and including) 2028. The reasons for undertaking the Exchange Programme have been explained by the chief executive of COCOBOD in a letter dated 11 July 2023 from the chief executive to all holders of the Cocoa Bills. A copy of the letter has been included in the Exchange Memorandum.

    For further details regarding the Exchange Programme, all holders of the Cocoa Bills are advised to read the contents of the Programme Documents carefully and consult a dealer, investment adviser or other professional for appropriate advice before making an investment decision. Copies of the Programme Documents are available at https://projects.morrowsodali.com/CocobodDDE, https://calbank.net/CocobodDDE and the website of COCOBOD (i.e. https://cocobod.gh/CocobodDDE).

    Offers may be submitted from today (i.e. 14 July 2023) until 4pm on 31 July 2023 (unless otherwise extended by COCOBOD in its sole discretion and with the prior approval of the Securities and Exchange Commission). An offer (once made) cannot be revoked or withdrawn at any time except in the limited circumstances described in the Exchange Memorandum.

    This announcement is for informational purposes only and is not an invitation to exchange to any holders of the Cocoa Bills. The invitation to exchange the Cocoa Bills is only being made pursuant to the Exchange Memorandum.

    COCOBOD has appointed CalBank Plc (CAL) as arrangers for the Exchange Programme.

    DOLLAR DENOMINATED BONDS

  • We are demanding equality in international system, not charity – African leaders

    We are demanding equality in international system, not charity – African leaders

    African leaders has initiated the mid-year African Union summit, focusing on economic integration and urging international financial system reforms.

    Deputy Secretary-General of the United Nations, Amina Mohamed, highlighted Africa’s disproportionate suffering amidst the ongoing global crises caused by the COVID-19 pandemic.

    “Unmet commitments by the international community to financing climate action and inadequate humanitarian responses, have further aggravated the obstacles to the efforts made by Africa and its leaders, to implement Agenda 2063,” she said.

    Amina Mohamed stated that the UN supports African leaders’ plea for more resources allocated to their economies through the International Monetary Fund (IMF), an institution criticized by various African leaders.

    Kenyan President, William Ruto, alongside other leaders, called for reforms within the World Bank and IMF. He emphasized the unfairness of the global debt system, which burdens African countries with payment obligations eight times higher than wealthier nations due to perceived risks.

    ”We are not asking for charity. We must have equality in the international system,” Ruto said.

  • Bawumia’s caucus throws subtle jabs at Kennedy Agyapong

    Bawumia’s caucus throws subtle jabs at Kennedy Agyapong

    Member of Parliament for Efiduase and leader of Dr. Bawumia’s faction, Nana Ayew Afriyie, has asserted that Kennedy Agyapong is directing his criticism towards the wrong individual concerning Ghana’s re-engagement with the International Monetary Fund (IMF). Afriyie emphasized that targeting Dr. Mahamudu Bawumia on matters related to Ghana’s return to the IMF is unwarranted.

    The Member of Parliament clarified that any matters pertaining to the International Monetary Fund (IMF) or the country’s economic challenges should be directed towards the Finance Minister, Ken Ofori-Atta.

    He also added that Dr. Mahamudu Bawumia is a strategist because of how he was able to bounce back from cleaning dormitories, driving cabs and doing other menial jobs to become the person he is now.

    “I will say that he should direct it to the Minister of Finance and when he (Bawumia) is in charge, he will take charge and take us to the promised land. We are going to the promised land. DMB is taking us there. …He (Agyapong) should attack the finance minister not him (Bawumia),” Nana Ayew Afriyie told TV3.

    “He shared his experiences. When he used to clean to go to school to pay his fees; drive taxis, cabs. So, any person can be president one day. Any person’s child, regardless of where you are in this country, there is an opportunity for you to be where you have to be,” he added.

    Background:

    An NPP flagbearer hopeful, Kennedy Agyapong fired shots at the campaign team of Vice President Dr. Mahamudu Bawumia.

    Speaking to delegates of the NPP in the Kintampo East Constituency as part of an ongoing campaign, the Assin Central MP sent a strong warning to the camp of the vice president noting that he will go on full offensive if the personal attacks directed at him do not cease.

    “If NPP people don’t engage in a clean campaign, they will be in trouble because I will reply when you say something.

    “For someone who claims to be a strategist, the dollar was GHC4 equivalent when we took power. Today, the dollar is GHC12. Do you think you are a strategist? Excuse me, strategist! Please,” Kennedy said.

  • $2.4b bailout package for Ghana will be paid in every six months – IMF

    $2.4b bailout package for Ghana will be paid in every six months – IMF

    The International Monetary Fund (IMF), has indicated that the remaining $2.4 billion bailout package for Ghana will be disbursed in installments every six months following program evaluations.

    In September 2023, a team from the IMF will visit Ghana, with an expected allocation of $600 million to assist with the country’s balance of payments.

    During a Question and Answer session at a recent IMF event, Julie Kozack, the Director of the IMF Communication Department, confirmed that the formal first review mission is scheduled for September 2023.

    Kozack reiterated that the objectives of the IMF program for Ghana encompass three main goals: restoring macroeconomic stability, ensuring debt sustainability, and establishing the groundwork for higher and more inclusive economic growth.

    The program also incorporates comprehensive reforms aimed at enhancing resilience while safeguarding the most vulnerable segments of the population.

    Regarding the next steps for debt restructuring, Madam Kozack stated that it is the responsibility of the official creditor committee to reach an agreement with the Ghanaian government on the specific modalities of debt relief. Furthermore, she emphasized the importance of the authorities’ continued engagement with external private creditors to seek relief for their external debt.

    She further mentioned that the government is in the final stages of restructuring its domestic debt. In June 2023, a staff team conducted a routine technical program engagement visit to Accra from June 8th to 15th. The formal first review mission is scheduled to occur in the coming fall.

    Ghana obtained an IMF program in May 2025, followed by the initial disbursement of $600 million as the first installment of the Extended Credit Facility (ECF) program.