IMF to disburse $360m third tranche to Ghana without creditors MoU

Mr. Abebe Aemro Selassie, Director, African Department, International Monetary Fund (IMF), said Ghana would receive its next financing support from the IMF even if it is unable to negotiate a final debt agreement with its official bilateral creditors.

This implies that the government will get its third tranche of US$360 million when the IMF Board meets in June 2024 to discuss the country’s second review programme, even if an agreement with creditors is not reached.

Ghana secured a staff-level agreement on its second review with the IMF mission team on Saturday, April 13, and the team highlighted that the country had made “strong progress” under the loan-support programme.

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It stated that the country’s next move would be to sign a Memorandum of Understanding (MoU) with its official creditors in accordance with the conditions agreed upon in January 2024 and the plan parameters.

Nonetheless, Mr Selassie highlighted that completing an MoU with creditors is not a requirement for the next payout, stating, “We’ve reached staff-level agreement, and that’s by far the most important component for the review.”

He briefed the media in Washington, USA, on Friday, April 19, at the introduction of the Regional Economic Outlook for Sub-Saharan Africa, as part of festivities for the 2024 IMF/World Bank Group Spring Meetings, which were covered by the Ghana News Agency.

He said: “The government [of Ghana] is in good faith discussions with the creditors and we hope that there will be an outcome… [and] reaching that agreement is important.”

“I should add here that the fact that they’ve not reached agreement with the Eurobond holders will not prevent us from being able to provide more finance,” Mr Selassie said.

Although he could not provide a deadline for the nation to achieve an MoU with its formal creditors, he did note that the country has earned a great deal of assurance and trust in the delivery of monies.

“As of now, there is no MoU with bilateral creditors, but we know that there have been intense discussions in recent weeks, and we’re very hopeful that they’ll be able to reach a deal with bilateral official creditors, but they’ve provided financial assurances,” he said.

The IMF African Director added that: “We’re not envisaging that [it] will be an issue for our ability to conclude the next review and provide the disbursement that’s pending [for Ghana].”

Speaking on the efficiency of the G20 Common Framework in aiding African countries, particularly Ghana, with debt talks, Mr Selassie stated that the framework has yet to yield a “desirable outcome.”

He was eager to point out that: “Without the common framework, we wouldn’t have made the kind of progress that we have in helping countries like Zambia, and Ghana move towards debt sustainability.”

Ghana began executing a $3 billion three-year Extended Credit Facility (ECF) deal with the IMF in May 2023, and has since received $1.2 billion.

This falls under the country’s domestic Post-COVID-19 Programme for Economic Growth (PC-PEG), which aims to restore macroeconomic stability and debt sustainability, improve resilience, and provide the groundwork for stronger and more equitable growth.

During the most recent review, the mission team found that the government had accomplished the majority of the quantitative objectives, with significant progress made on important structural reform milestones.

It also stated that the government’s policies and reforms aimed at restoring macroeconomic stability and debt sustainability while creating the groundwork for greater and more equitable development were yielding good outcomes.

GNA

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