Ghana, IMF reach staff level agreement after first review
The International Monetary Fund (IMF) has reached a staff-level agreement with Ghanaian authorities regarding the first review of the nation's economic program under the Extended Credit Facility.
The IMF staff team, led by Mission Chief Stéphane Roudet, conducted extensive discussions in Accra from September 25 to October 6, 2023, assessing progress on reforms and policy priorities.
This agreement, subject to IMF Management approval and Executive Board consideration after necessary financing assurances, is a pivotal step towards Ghana's economic stabilization. Following the Executive Board review, Ghana is set to gain access to approximately US$ 600 million, further bolstering the total financial support provided by the IMF to about US$1.2 billion since May 2023.
Facing a severe economic and financial crisis, Ghana's authorities have implemented crucial macroeconomic adjustments, successfully concluded a domestic debt restructuring operation, and initiated extensive reforms. The statement said the positive outcomes are already evident, with stronger-than-expected growth, reduced inflation, improved fiscal and external positions, and stabilized exchange rates in 2023.
It added that aligned with commitments in the Fund-supported program, Ghana has demonstrated robust fiscal performance, advancing towards a substantial reduction in the fiscal primary deficit by approximately 4 percentage points of GDP in 2023. Spending has adhered to program limits, while significant expansions in social protection programs have been undertaken to shield the most vulnerable populations. On the revenue front, Ghana has met its non-oil revenue mobilization target.
To sustain this progress, the statement said the next crucial step lies in securing an agreement with official creditors on the terms of a debt treatment consistent with the IMF Executive Board-approved program parameters and debt targets. The IMF urges official creditors to expedite this process, aligning with the financing assurances provided in May 2023.
Meetings were held with key figures including Vice President Bawumia, Finance Minister Ofori-Atta, and Bank of Ghana Governor Addison, alongside their respective teams. The IMF team also engaged with various government agencies and stakeholders, expressing gratitude for their cooperative and transparent engagement.
Read the entire statement 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
October 6, 2023
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$600 million in financing once the review is approved by IMF Management and formally completed by the IMF Executive Board. To ensure timely completion of the review, the country needs official creditors to quickly reach agreement on a debt treatment in line with the financing assurances they provided in May 2023.
- The authorities’ strong policy and reform commitment under the program is bearing fruit, and signs of economic stabilization are emerging. Growth in 2023 has proven more resilient than initially envisaged, inflation has declined, the fiscal and external positions have improved, and the exchange rate has stabilized.
Accra, Ghana: An International Monetary Fund (IMF) staff team, led by Mr. Stéphane Roudet, Mission Chief for Ghana, held meetings in Accra from September 25 to October 6, 2023, to discuss progress on reforms and the authorities’ policy priorities in the context of the first review of Ghana’s three-year program under the Extended Credit Facility. The arrangement was approved by the IMF Executive Board for a total amount of SDR 2.242 billion (US$ 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.
IMF Communications Department