IMF Approves Immediate $600 Million Payout for Ghana in Loan Program

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The International Monetary Fund’s board has given the green light for the first review of Ghana’s loan program, leading to an immediate disbursement of approximately $600 million under the $3 billion bailout initiative. The decision follows Ghana’s agreement to restructure $5.4 billion of loans with official creditors, a crucial step toward unlocking the second tranche of IMF funding.

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“All quantitative performance criteria for the first review and almost all indicative targets and structural benchmarks were met,” stated the IMF. The reform efforts by Ghana’s authorities have contributed to improved growth, reduced inflation, and increased international reserves. The IMF forecasts a 2.3% growth in the economy for 2023 and 2.8% in 2024.

In a joint briefing with Ghanaian authorities, IMF Mission Chief for Ghana Stéphane Roudet mentioned that the tranche would be available to the central bank within hours.

Ghana sought IMF assistance in 2022 amid its worst economic crisis in a generation, marked by escalating public debt-servicing costs. Leslie Dwight Mensah, an economist at the Institute for Fiscal Studies in Accra, expressed that the board’s decision, coupled with the imminent release of funds, provides a boost to the economy, particularly concerning the exchange rate’s vulnerability.

The second tranche is expected to trigger an additional $550 million in World Bank funding, including $300 million in budget support and $250 million for a fund supporting financial sector stability. Finance Minister Ken Ofori-Atta revealed that the World Bank is set to meet on Jan. 23 to approve these disbursements.

Ghana, which defaulted on most external debt due to soaring servicing costs, needs to negotiate a relief deal with private holders of around $13 billion in international bonds. Ofori-Atta anticipates official engagement with bondholders to commence next week, with hopes of reaching an agreement by mid-March. When asked about the contingency of the next tranche of $360 million on Ghana reaching this agreement, the IMF’s Roudet emphasized the importance of the government engaging in good faith discussions, expressing hope for significant progress in the coming weeks. Ghana aims to restructure two-thirds of its external debt, totaling about $30 billion at the end of 2022.

Editorial Staff
Editorial Staffhttps://www.naija247news.com/
Naija247news is an investigative news platform that tracks news on Nigerian Economy, Business, Politics, Financial and Africa and Global Economy.

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