For months now, Ghana has been trying to secure a $3 billion bailout loan from the International Monetary Fund, and yesterday both parties finally reached an agreement.
An IMF team led by Mr. Stéphane Roudet, Mission Chief for Ghana, has been in discussions with the Ghanaian government in Accra since the 1st of this month.
A conclusive statement from Mr. Stéphane Roudet, following the 13-day dialogue, reads; “I am pleased to announce that the IMF team reached a staff-level agreement with the Ghanaian authorities on a three-year program supported by an arrangement under the Extended Credit Facility (ECF) in the amount of SDR 2.242 billion or about US$3 billion. The economic program aims to restore macroeconomic stability and debt sustainability while laying the foundation for stronger and more inclusive growth. The staff-level agreement is subject to IMF Management and Executive Board approval and receipt of the necessary financing assurances by Ghana’s partners and creditors.”
The meetings saw Ghanaian authorities rationalizing their intent to the IMF team for requesting the loan. Ghanaian authorities listed reasons include; “reducing inflation, restoring public debt sustainability, enhancing resilience to external shocks, improving the market, protecting the vulnerable, preserving financial stability, and laying the foundation for strong and inclusive recovery.
The Ghanaian government also promised to strengthen its monetary policy framework and promote exchange rate flexibility to rebuild external buffers.
Last week, the country demonstrated its economic prowess by taking its currency, the Ghanaian Cedi, from its previous position as the worst-performing currency in the world to the world’s best-performing currency. Read the story here. This was thanks to the debt restructuring scheme the government established.
The IMF delegates these past 13 days met with Ghanaian representatives including Vice President Bawumia, Finance Minister Ofori-Atta, and Bank of Ghana Governor Addison, as well as representatives from various government agencies.