The International Monetary Fund (IMF) is confident that the country will reach an agreement with its bilateral creditors, paving the way for the fund’s executive board to approve the disbursement of additional funding to the economy later this year.
Ghana, earlier this month, secured a staff-level agreement from the fund and would now have to pass all conditions for the IMF executive board to consider its second review and approve the disbursement of US$360million by June end.
One of those conditions is the signing of Memoranda of Understanding (MoU) with bilateral creditors to seal the financing assurances secured last year.
The IMF’s Mission Chief to Ghana, Stephane Roudet, said the MoU with official creditors was a matter of time as everything showed that all parties were aligned.
“We are hopeful, confident that this MoU with bilateral creditors will happen in time for us to be able to have a board meeting and complete the second review of the programme before the end of June,” the Mission Chief told journalists in Washington D.C in the United States of America.
The country needs approval of the next review and the subsequent disbursement to bolster confidence, unlock further funding and entrench the economic progress and relative stability achieved so far.
Spring meetings
The IMF Mission Chief was addressing Ghanaian journalists on the country’s fund-assisted programme on the side-lines of the IMF/World Bank Spring Meetings that ended over the weekend.
He said Ghana’s restructuring story was also historic, timely and exemplary, given the speed and smoothness with which it was being executed compared to other countries where similar exercises took place to bring debt levels into sustainable threshold.
Mr. Roudet also disclosed that prudent measures by the government, under the US$3billion extended credit facility (ECF) programme, led to the economic recovery being quicker.
He said the economy was stronger than initially projected, with growth, inflation, gross reserves, among other macroeconomic indices, now in better positions than forecast.
He said gross domestic product (GDP) growth would be revised upward in the next IMF review in reflection of the positive signals picked by the fund during the last mission in March.
Eurobondholders’ deal
Earlier, the Director of the IMF Africa Department, Mr. Abebe Selassie, also praised Ghana for its speedy restructuring exercise, noting that nothing fundamental was blocking a deal with Eurobondholders – which is the last leg of the debt rework exercise meant to achieve debt sustainability.
Mr. Selassie, however, stressed that a deal with Eurobondholders was not a prerequisite to approving the second review, stressing that all the fund wanted to see was constructive and ongoing discussions with the commercial holders of Ghana’s debts issued in foreign currencies.
“I should add here that the fact that they have not reached an agreement with its Eurobondholders will not prevent us from being able to provide more financing, although reaching that agreement is [of course] important,” the IMF Africa Director said in response to questions at the 2024 Spring Meetings.
Eurobond creditors must act
Mr. Selassie said while Zambia and other countries took more than nine months to reach agreements with their bilateral creditors, Ghana achieved that feat earlier, making its restructuring exercise exemplary.
He said it was historic for a country to successfully execute a domestic and external restructuring exercise within the period Ghana executed its and commended the citizens, the government and creditors for making the exercise a success.
The Director of the IMF Africa Department stressed that while Ghana and its people had done their part to achieve debt sustainability, the ball was now in the court of commercial creditors in securing a deal for the economic recovery to be sustained.
“Ghana has done its fair share and it is for creditors to take steps on this,” he said at the press conference streamed live across the globe.
“We are not going to ask the government to do more adjustments because creditors have not asked either. So, we will provide all the information necessary so creditors can move, allowing us to go to the board as soon as possible,” Mr. Selassie said.
2025 Budget
Mr. Selassie added that the fund’s recent mission in Ghana also reached an agreement with the government on policies to tackle the most recent issues.
He said those policies would be announced in the 2025 Budget, which he described as an important one.
The country goes to the polls this December to elect a successor to President Nana Akufo-Addo, entrenching a democratic practice that has become exemplary for the turbulent West African sub-region and Africa as a whole since 1992.
