• Additional $900m from World Bank expected
Ken Ofori-Atta — Minister of Finance

IMF- Ghana Budgetary approval: $350m for stability fund

The financial services sector, banks especially, is set to receive a major boost of a total $350 million to operationalise the Financial Sector Stability Fund, a senior government official have revealed.


The fund is made up of $250 million from the World Bank and $100 from the African Development Bank.

The recent Creditor Committee co-chaired by France and China granting of financial assurance to the country has thus paved the way for the IMF to finally approve Ghana’s three-year budgetary support programme of $3 billion.

In an interview with the Graphic Business, Minister of State at the Ministry of Finance, Dr Mohammed Amin Adam, said the approval of the IMF programme would unlock the much needed financing from development partners. 

He said the government was at an advanced stage of discussions with the World Bank for a US$250 million facility to support the establishment of the Financial Sector Stability Fund which was aimed at supporting banks who were hardly hit by the Domestic Debt Exchange Programme (DDEP).

The government is also in discussions with the African Development Bank (AfDB) for another US$100 million to support the establishment of this fund.

Banks in the country were adversely affected by the DDEP, with 16 out of the 23 banks operating in the country recording significant losses in the 2022 financial year.

Although five banks recorded profits, the profits recorded was a huge decline from what they recorded in 2021 on account of the domestic debt exchange programme which saw government swap a total of GH¢82 billion of old bonds to 12 new ones at a reduced coupon rate.

The debt restructuring programme which saw the participation of all the 23 banks forced the banks to set aside huge amounts of money as impairment losses and this is what has led to majority of the banks recording losses in 2022.

This has led to severe liquidity and capital challenges for the banks, with some already rolling out plans to quickly recapitalise.

As a sector that recently went through some reforms and which saw the collapse of nine banks, these fresh challenges have raised a lot of concerns.

To help address these concerns, the government announced the establishment of the Financial Sector Stability Fund to help solve the liquidity and solvency challenges of the affected banks.

$900 million budget support 

Dr Amin Adam also disclosed that the government was also in discussions with the World Bank for a three-year development policy budget support programme which would see the country receive US$900 million from the Bretton Woods institution.

He said when concluded, $300 million would be disbursed to the country each year.

“This will complement what the IMF is giving us,” he stated.

IMF deal 

Dr Amin Adam said the approval of the country’s IMF programme by the Executive Board, which is expected to happen tomorrow (May 17), would serve as a major boost for the country in its discussions with the World Bank and the AfDB.

Ghana’s economy has been faced with a myriad of challenges ranging from high inflation, which hit a 22-year high of 54.1 per cent in December 2022, and an unsustainable public debt of GH¢575.7 billion accounting for about 100 per cent of Debts to Gross Domestic Product (GDP ratio).

This prompted the country to seek help from the IMF in July last year and although the government was able to reach a staff-level agreement with the fund in December last year, a board-level approval, which will pave the way for the disbursement of the US$3 billion support, was hinged on the country’s ability to restructure both its domestic and external debt.

Although the domestic debt exchange programme had been concluded and described as a success by the Ministry of Finance, what was holding back the deal was the restructuring of the external debt of about $5.1 billion.

Last week Friday, the country received good news as the Creditor Committee, co-chaired by China and France granted the country with the financial assurances, paving the way for the Executive Board of the IMF to now approve Ghana’s programme.


Dr Amin Adams said the Executive Board of the Fund was expected to sit on Ghana’s programme of Wednesday May 17, 2023, with approval expected soon after the sitting.

Boost for cedi

The Minister of State also noted that the first tranche of US$600 million out of the US$3 billion support would be released immediately after the Executive Board approval.

Although the US$600 million is for budget support, it would serve as a balance of payment support because the money will be paid through the Bank of Ghana.

This, in turn would serve as a major boost for the local currency which has been relatively stable in the first few months of the year.


The second tranche of another $600 million is also expected to hit the accounts of the Bank of Ghana in November after the country has completed the first phase of the programme.

The rest which will be released in five tranches of $360 million each after each of the semi-annual reviews are successfully concluded.

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