Cash-strapped Ghana secures $3bn IMF loan
The Executive Board of the International Monetary Fund (IMF) has approved a 36-month arrangement under the Extended Credit Facility (ECF) in an amount equivalent to SDR 2.242 billion (around US$3 billion, or 304 percent of quota) for Ghana.
The Washington-based fund said the decision will enable an immediate disbursement equivalent to SDR 451.4 million (about $600 million).
“The authorities’ economic programme, supported by the ECF arrangement, builds on the government’s Post COVID-19 Program for Economic Growth, which aims to restore macroeconomic stability and debt sustainability and includes wide-ranging reforms to build resilience and lay the foundation for stronger and more inclusive growth,” it said in a statement on Wednesday.
The IMF said securing timely debt restructuring agreements with external creditors would be essential for the successful implementation of the new ECF arrangement.
It said large external shocks in recent years have exacerbated Ghana’s pre-existing fiscal and debt vulnerabilities, resulting in a loss of international market access, increasingly constrained domestic financing, and reliance on monetary financing of the government.
“Decreasing international reserves, Cedi depreciation, rising inflation and plummeting domestic investor confidence, eventually triggered an acute crisis. The authorities have taken bold steps to tackle these deep challenges, including by accelerating fiscal adjustment,” it added.
According to the statement, the government has also launched a comprehensive debt restructuring to address severe financing constraints and the unsustainable public debt.
It said the programme would help Ghana overcome immediate policy and financing challenges, including through its catalytic effect in mobilising external financing from development partners and providing a framework for the successful completion of the ongoing debt restructuring.
The Managing Director of IMF, Ms. Kristalina Georgieva, said, “The combination of large external shocks and preexisting fiscal and debt vulnerabilities precipitated a deep economic and financial crisis in Ghana. In response, the authorities have launched a comprehensive reform program, to be supported by the ECF-arrangement.
“It is focused on restoring macroeconomic stability and debt sustainability as well as implementing wide-ranging reforms to build resilience and lay the foundation for stronger and more inclusive growth. Capacity development and continued support by development partners would be critical for the successful implementation of the authorities’ program.”
