Ghana has cleared a crucial milestone in its economic recovery journey, securing a Staff-Level Agreement with the International Monetary Fund (IMF) for the second review of the Extended Credit Facility. However, the disbursement of the planned $360 million is contingent upon Ghana obtaining essential financial assurances from its external creditors.
From April 2-12, 2024, an IMF staff delegation, led by Stéphane Roudet, the Mission Chief for Ghana, convened in Accra to assess the country's reform progress within the framework of its three-year program under the Extended Credit Facility.
Despite reaching a Staff-Level Agreement, Ghana faces a significant hurdle in obtaining financing assurances from its external bilateral creditors. The IMF has made it clear that the agreement is subject to approval by IMF Management and the Executive Board, pending the receipt of necessary financial assurances.
The IMF underscores the importance of an agreement between Ghanaian authorities and official creditors on a Memorandum of Understanding (MoU) for debt treatment, aligning with program parameters. This agreement is crucial to providing the required financing assurances for the disbursement.
In January 2024, Ghana's Finance Ministry outlined plans for a debt relief program with official bilateral creditors, anticipating the finalization of terms in an MoU. However, negotiations with individual creditors pose challenges, particularly regarding the comparability of treatment, which could potentially delay the IMF Executive Board's approval of Ghana's program.
Until Ghana formalizes the MoU and secures the necessary financial assurances, the $360 million earmarked for disbursement remains pending. Nonetheless, Ghanaian authorities express confidence in fruitful discussions with external creditors, especially in the bilateral sector, to facilitate the debt restructuring process.
As Ghana navigates this intricate process, securing the needed financial assurances will be crucial to bolstering its economic recovery efforts and ensuring the timely implementation of reform measures outlined in its program with the IMF.
