The International Monetary Fund (IMF) has approved the immediate disbursement of $360 million to Ghana following the country’s successful debt restructuring agreement with its official creditors.
This new tranche brings the total disbursement to $1.56 billion since Ghana entered into a $3 billion three-year program with the IMF in May 2023.
The IMF’s decision, announced after an executive board meeting on Friday, follows a staff-level recommendation made in April, which stipulated the release of funds contingent upon Ghana securing a memorandum of understanding with its bilateral lenders.
Ghana met this condition on June 11 by agreeing to restructure $5.1 billion in debts.
The infusion of funds will bolster the Bank of Ghana’s efforts to stabilize the cedi, which has depreciated by nearly 22% against the dollar this year, positioning it as the fourth-worst performing currency among those tracked by Bloomberg.
“This agreement on a debt treatment, consistent with program parameters, provided the financing assurances necessary for the second review under the extended credit facility arrangement to be completed,” the IMF stated.
Ghana’s journey to financial stabilization includes the reorganization of nearly all its $43 billion debt under the Group of 20’s Common Framework.
In addition to the official creditors’ agreement, Ghana also reached a preliminary accord with private creditors to restructure $13 billion in eurobonds.
This marks a significant step in the comprehensive debt restructuring process that began 18 months ago.
The IMF noted that Ghana’s performance under the program has been generally strong, despite the challenging economic environment.
“The medium-term outlook remains favorable but subject to downside risks — including those related to the upcoming general elections,” the IMF cautioned.
Ghana is set to hold presidential and parliamentary elections on December 7, raising concerns about potential election-related budget overruns.
The IMF emphasized the importance of maintaining fiscal discipline to ensure the program’s success and the country’s economic recovery.
The G-20 framework, which now includes sovereign creditors such as China, aims to ensure fair sharing of debt restructuring losses between bond investors and bilateral lenders.
Ghana’s agreement with private creditors is consistent with these principles but requires confirmation on comparability of treatment by the official creditor committee.