IMF lauds Ghana's economic progress as reason for third tranche disbursement

The International Monetary Fund (IMF) has commended Ghana for its stellar economic performance amidst global challenges.

During a joint press conference held on July 1, 2024, IMF Mission Chief for Ghana, Stephane Roudette, praised the country's significant strides under the IMF-supported Post-COVID-19 Programme for Economic Growth (PC-PEG).

"Ghana's performance under the PC-PEG has been commendable," Roudette stated. "The country has surpassed expectations with a strong GDP growth of 4.7% in the first quarter of 2024, demonstrating resilience and effective implementation of fiscal policies."

He noted that Ghana's performance under the programme has been generally strong, with all quantitative performance criteria for the second review and all indicative targets met, except one. He stated that significant progress is being made on key structural reforms, including enhancing revenue mobilization and streamlining non-priority expenditures, which, when realized, will further solidify the economy.

The IMF last Friday approved the disbursement of the third tranche of $360 million. This new tranche will take the total IMF disbursements under the three-year bailout programme, designed to help Ghana out of its economic challenges, to about US$1.6 billion.

The decision comes after the country finalized a deal with its Official Creditor Committee, a step that had been a prerequisite to unlock the third tranche.

Finance Minister Mohammed Amin Adam, in his address, highlighted the robust measures that accounted for this progress. "These robust measures are behind the rejuvenated economy that we’ve witnessed in recent times," he said.

"Growth is proving to be more resilient and robust than initially programmed, and the economy continues to show strong signs of recovery in Q1 of 2024. Overall, Real GDP growth for Q1 2024 was 4.7%, the highest since Q1 of 2022.

This growth performance is better than the 3.1% growth recorded in the same period in 2023. Industry grew the most at 6.8%, followed by Agriculture at 4.1% and Services at 3.3%. The 2024 Q1 GDP growth rate for industry is the highest since Q4 of 2020," he added.

Minister Amin Adam also noted the progress in managing inflation and stabilizing the exchange rate. "Headline inflation declined to 23.1% in May 2024 from 25.0% in April 2024, after peaking at 54.1% in December 2022. The Cedi has also stabilized, with year-to-date depreciation against the US dollar at 18.4%, compared to 22.0% in the same period in 2023."

Significant achievements in debt restructuring were also underscored. "The country reached an agreement with the Official Creditor Committee (OCC) to restructure $5.1 billion of Ghana’s official bilateral loans, resulting in debt service relief of $2.8 billion between 2023 and 2026. Additionally, the government has negotiated with Eurobond holders to restructure $13.1 billion, which will lead to the cancellation of $4.7 billion in debt and provide debt service relief of $4.4 billion from 2023 to 2026," he said.

The Minister maintained that the government is committed to maintaining fiscal discipline and continuing structural reforms to ensure sustained economic recovery and growth.

"We are committed to sustaining our macroeconomic policy adjustment and reforms to fully restore macroeconomic stability and debt sustainability while fostering a sustainable increase in economic growth and poverty reduction," he concluded.

KOD