The International Monetary Fund (IMF) has completed its third review of Ghana’s $3 billion Extended Credit Facility (ECF) program, approved in May 2023.
The positive outcome of the review unlocks a disbursement of approximately $360 million (SDR 269.1 million), bringing total disbursements under the program to around $1.9 billion.
According to the IMF, Ghana’s economic reforms and policy adjustments are yielding positive results. Deputy Managing Director Bo Li highlighted that the country’s economic strategy is achieving its objectives, with improvements in key areas such as growth, fiscal performance, and inflation.
“The economy is showing clear signs of stabilisation,” Li stated.
The ECF program aims to restore macroeconomic stability, ensure debt sustainability, and foster inclusive growth in Ghana. Key progress points noted in the review include:
- Macroeconomic Recovery: Ghana has seen a swift recovery in economic growth, a reduction in inflation (although slower than expected), and improvements in fiscal and external balances.
- Public Debt Restructuring: The country successfully restructured its domestic debt and Eurobonds in line with the program’s objectives, while continuing negotiations with external creditors for further restructuring.
- Fiscal Discipline: The government achieved a primary surplus of 0.5% of GDP, with a target of 1.5% by 2025, relying on increased domestic revenue, rationalizing non-priority expenditures, and expanding social support programs for vulnerable groups.
The Bank of Ghana’s prudent monetary policies have helped reduce inflation and rebuild international reserves, while efforts to stabilize the financial sector are underway, including measures to support the recapitalisation of banks.
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Bo Li stressed that Ghana must continue its reform implementation to address structural challenges, particularly in sectors like energy and cocoa.
He emphasized the importance of maintaining fiscal discipline and policy adjustments, particularly in the lead-up to the upcoming elections.
Looking ahead, the IMF urges Ghana to strengthen tax administration, modernize fiscal responsibility frameworks, and address energy sector challenges to reduce fiscal risks.
Strengthening governance and transparency will also be crucial for attracting private sector investment and creating jobs.
The IMF reaffirmed its commitment to supporting Ghana’s journey toward sustainable growth and long-term economic stability.
