- Amin Adam expressed optimism about the country's economic
- Ghana to receive an immediate disbursement of $360 million
- Ghana's performance has been positive
Ghana’s Finance Minister, Dr. Mohammed Amin Adam, expressed optimism about the country’s economic recovery following the IMF’s approval of the second review under a $3 billion loan program.
This approval allows Ghana to receive an immediate disbursement of $360 million, bringing the total received so far to $1.6 billion. This is a significant step forward for the economic reform program launched in May 2023.
Ghana Makes Strides in Debt Restructuring
Dr. Adam highlighted key achievements that have strengthened Ghana’s economic outlook. These include reaching debt restructuring agreements with both official creditors and private Eurobond holders in June 2024.
The agreement with official creditors is expected to provide debt service relief of $2.8 billion between 2023 and 2026, while the agreement with Eurobond holders is expected to result in debt cancellation of $4.7 billion and debt service relief of $4.4 billion over the same period.
Maintaining Fiscal Discipline
The government remains committed to fiscal consolidation despite the upcoming elections. This commitment includes increasing domestic revenue collection and tightening spending controls to avoid setbacks.
The IMF acknowledges Ghana’s progress, noting an improvement in the country’s primary fiscal balance by over 4% of GDP last year.
IMF Praises Progress, Notes Areas for Improvement
The IMF Mission Chief for Ghana, Stéphane Roudet, commended Ghana’s economic reform program for delivering on its objectives. He highlighted the program’s role in stabilizing the economy and restoring debt sustainability.
The IMF’s assessment of Ghana’s performance has been positive. All quantitative performance criteria for the second review and most indicative targets were met. Progress on key structural reforms is also acknowledged, though some delays were noted.
The Bank of Ghana’s role in maintaining a stable monetary policy was recognized as crucial. This has contributed to a rapid reduction in inflation and efforts to rebuild international reserves. The central bank is also commended for taking steps to ensure the stability of the financial sector.
Ghana Completes Record-Setting Debt Restructuring
Dr. Adam highlighted the unique aspects of Ghana’s debt restructuring process, including its swift completion and being the first time an international debt restructuring has been initiated and finalized by the same administration.
Looking Ahead: Challenges and Opportunities
While the overall outlook is positive, both the Finance Minister and IMF representative cautioned about potential challenges. The upcoming general elections pose potential risks to the medium-term economic outlook.
The IMF emphasized the importance of continuing macroeconomic policy adjustments and reforms to fully restore stability and debt sustainability, especially during the election period. This will be crucial for achieving sustainable economic growth and poverty reduction.
Dr. Adam concluded by expressing gratitude for the support of Ghana’s development partners, including the IMF, World Bank, and bilateral partners. He also thanked bondholders for their cooperation and the leadership of China and France in the debt restructuring process.
