Ghana expects first US$600m tranche IMF loan today

The Governor of the Bank of Ghana (BoG), Dr Ernest Addison, has announced that the first tranche of $600 million from the $3 billion loan facility provided by the International Monetary Fund (IMF) will be deposited into the Government's account on Friday.

The funds will be utilized to reduce interest payments, manage debt levels, and address the budget deficit as part of the government's efforts to restore macroeconomic stability and ensure the sustainability of the country's debt.

During a press conference in Washington DC, Dr Addison stated, “We have received confirmation today to access the funds, and the value will be credited to $604 million tomorrow.”

An additional $250 million in funding is expected to be disbursed at the end of the third quarter, along with financial support from the African Development Bank (AfDB) and other development partners.

All these funds will support the Government's three-year Post-COVID-19 Programme for Economic Growth (PC-PEG), aimed at enhancing the resilience of the Ghanaian economy and its ability to withstand future shocks.

Responding to a question on the purpose of the $600 million, the Finance Minister, Mr Ken Ofori-Atta, explained, “The funds are crucial to reducing our interest payments and supporting our debt. We have a budget deficit and are aiming for zero financing, so the $600 million will be utilized to continue supporting our programs.”

Mr Ofori-Atta emphasized the government's commitment to protecting the vulnerable through social protection measures while ensuring efficiency in service delivery.

He also urged Ghanaians to prioritize food security and reduce imports of rice, poultry, and tomatoes by producing them locally, which would contribute to the sustainability and resilience of the program beyond the three-year period.

According to Mr Stephane Roudet, IMF Mission Chief for Ghana, the program aims to establish a solid foundation for the government's finances and promote sustainability through comprehensive policy and structural reforms.

He emphasized the importance of providing better services at lower costs, expanding social protection programs, and increasing expenditure efficiency to achieve macroeconomic stability and support the most vulnerable populations.

The $3 billion IMF loan to Ghana is a response to the economic crisis caused by the COVID-19 pandemic, the Russia-Ukraine conflict, and internal structural issues, all of which the government has pledged to address promptly.