Summary
- The IMF has approved Ghana's $3 billion bailout request to revive its struggling economy.
- The funds will be disbursed in tranches, starting with an initial tranche of $600 million.
- Ghana sought IMF assistance due to its debt situation, COVID-19 pandemic, and other economic challenges.
- President Akufo-Addo expressed confidence in the IMF deal, aiming for economic stabilization and growth.
Accra, May 18 – The Executive Board of the International Monetary Fund (IMF) has granted approval for Ghana's $3 billion bailout request, aimed at revitalizing the country's struggling economy.
The decision was made during the Executive Board's meeting on Wednesday, following Ghana's receipt of financing assurances from the Paris Club. Several sources familiar with the matter have confirmed the approval of the three-year extended credit facility for Ghana, as reported by international media giants Reuters and Bloomberg.
To provide further details on the outcome of the IMF Executive Board meeting regarding Ghana's bailout request, the International Monetary Fund will hold a virtual press conference on Thursday, May 18.
Last Friday, IMF Managing Director Kristalina Georgieva announced that Ghana's official creditors had provided the necessary financing assurances for the IMF Executive Board to consider signing off on the loan.
Mohammed Amin Adam, Minister of State at the Finance Ministry, expressed optimism regarding the deal, stating, “We expect a deal on Wednesday. With the disbursement, there is going to be $600 million as a first tranche just immediately after the approval.” He added that a second tranche of $600 million is expected to be approved after a successful first review of the program in November or December, with the remaining amount disbursed in equal tranches of $360 million after semi-annual reviews.
The approved funds will bolster Ghana's financial reserves and support efforts to achieve a target of foreign reserves equivalent to three months of imports by 2026, according to Adam.
Ghana sought financial assistance from the International Monetary Fund due to various factors, including its alarming debt situation, the impact of the Covid-19 pandemic, adverse effects of the Russia-Ukraine war, the banking sector clean-up, and excess capacity payments in the energy sector.
Vice President Dr. Mahamudu Bawumia acknowledged the government's limited options for generating sufficient revenue amid the worsening economic challenges, leading to the decision to seek support from the IMF.
President Nana Addo Dankwa Akufo-Addo expressed confidence in Ghana's engagement with the International Monetary Fund, highlighting its role in stabilizing the economy and promoting growth. He emphasized that the collaboration with the IMF aims to repair public finance in the short term and enhance the country's balance of payments, ultimately advancing Ghana's goal of achieving economic self-reliance through the “Ghana Beyond Aid” agenda.
