Ghana to receive first tranche of IMF money by Wednesday a hoax? – Analysts poke holes

Economists and analysts have questioned the possibility of Ghana to receive the first tranche of the $3 billion from the International Monetary Fund by Wednesday or this week as government has stated.

Minister of State responsible for Finance, Mohammed Amin Adam stated that the Fund will likely approve the first tranche of a $600 million loan for Ghana by Wednesday, May 17, 2023.

The Minister said the government expects the IMF Executive Board to approve the credit facility after meeting all pre-conditions and requirements particularly after financing assurances have been granted by official creditors, China and the Paris Club.

“We expect a deal on Wednesday. With the disbursement, there is going to be $600 million as a first tranche just immediately after the approval,” he told Reuters via phone.

However, the Director of the Institute of Economic Affairs, Dr. John Kwakye, has noted that checks conducted on the IMF Board meeting schedule do not show that Ghana will be meeting the Board even by May 24.

On Monday, May 15, 2023, he wrote on Twitter, “My check on IMF Board Meeting Schedule for the coming week shows the following: May 17, Benin; May 22, lndonesia; May 24, Cote d'Ivoire; May 25, Mali. So where is Ghana? Unless somebody is seeing a different schedule. Please share it if you are.”

On the same tangent, Vice President of policy think tank IMANI Africa, Bright Simons noted that the government must be cautious as it seems to be overplaying its cards and stampeding the technical processes of the IMF.

He wrote: “Ghana is back to its usual mode of stampeding technical work at the IMF. It has announced Board approval & release of $600m next week when significant work remains ongoing as to the precise details & timing of tranches etc. Ghana risks overplaying the political cards it holds”

He also added that “It is not clear why the politicians feel the need to do this. It is very unusual behavior. Every sophisticated investor knows that whilst the full commencement of the IMF program is an important milestone it is not itself a turning point. The govt should keep its eye on the ball.”

On the other hand, Dr Amin Adam was however optimistic that the funds will be disbursed into the Bank of Ghana account within a week of the IMF Board’s approval.

Speaking on the second tranche of the $600 million loan, the minister of State said the government expects the funds to also hit the Central Bank’s account in November or December after a successful review of the first loan tranche under the programme.

Dr Amin Adam added that the rest of the funds will be disbursed in equal tranches of $360 million after the IMF has conducted its semi-annual reviews of the extended credit facility.

“The funds will boost Ghana’s coffers and help it work towards the target of foreign reserves amounting to the equivalent of three months of imports by 2026,” the minister of State told Reuters.

See the IMF's calendar below

1/

Ghana is back to its usual mode of stampeding technical work at the IMF. It has announced Board approval & release of $600m next week when significant work remains ongoing as to the precise details & timing of tranches etc. Ghana risks overplaying the political cards it holds pic.twitter.com/oCSqSuat67

— Bright Simons (@BBSimons) May 15, 2023

My check on IMF Board Meeting Schedule for the coming week shows the following: May 17, Benin; May 22, lndonesia; May 24, Cote d'Ivoire; May 25, Mali. So where is Ghana? Unless somebody is seeing a different schedule. Please share it if you are.

— J. K. Kwakye (@JohnKwabenaKwa1) May 15, 2023

SSD/MA