Ghana made a call to the IMF on July 1, 2022 for a credit facility to rejuvenate the ailing economy partly precipitated by the COVID-19 impact and the effect of Ukraine and Russia war. Negotiations have been on-going. It has been confirmed by the finance Minister of Ghana, Mr. Ken Ofori Atta Ghana and the International Monetary Fund (IMF) have reached a preliminary agreement for the fund to support the economy with a US$3 billion credit to help rationalize the fiscal and monetary imbalances.
According to the Finance Minister, the first tranche of the fund is expected to hit the Central Bank account in the course of the first quarter of 2023 pending efforts to restructure the debt stock to help qualify for the fund support. It was added that when this credit facility is given it will help to restore economic stability and reduce inflation. Subject to final approval by the management and Executive Board of the Bretton Woods institution even though the staff of the IMF have approved already.
The final approval of the proposed three-year extended credit facility is dependent on implementing a sustainable debt restructuring. Mr. Ofori Atta told the press that the 2023 Budget was tailored to suit debt restructuring, revenue mobilization and also to cut expenditure. He added that he will meet the stakeholders of the organised labour unions to discuss the nitty-gritties of the domestic debt restructuring. Ghana’s debt was deemed unsustainable, leading to a domestic debt swap program launched on December 5, 2022 to swap GHc137 billion of locally issued Cedi bonds for four new bonds maturing between 2027 and 2037. Restructuring of the overseas component is pending and will start soon , said Finance Minister Ken Ofori-Atta.
“To support the objective of restoring public debt sustainability, the authorities have announced a comprehensive debt restructuring. Sufficient assurances and progress on this front will be needed before the proposed Fund-supported programme can be presented to the IMF Executive Board for approval,” he said.