IMF approves second tranche of $600 million for Ghana as economic support

The International Monetary Fund (IMF) has granted its approval for Ghana to receive an additional $600 million in the second tranche of a $3 billion, 36-month Extended Credit Facility (ECF) Arrangement.

The announcement, made in a statement on Friday, January 19, 2024, signifies the successful completion of the First review, enabling an immediate disbursement of SDR 451.4 million (approximately US$600 million). With this approval, Ghana has surpassed its first review milestone under the IMF program, having received the initial tranche in May of the previous year.

“The Executive Board of the International Monetary Fund (IMF) completed today the First review of the $3 billion, 36-month Extended Credit Facility (ECF) Arrangement, which was approved by the Board on May, 17, 2023 , as well as the 2023 Article IV Consultation with Ghana. The completion of the first ECF review allows for an immediate disbursement of SDR 451.4 million (about US$600 million), bringing Ghana’s total disbursements under the arrangement to about US$1.2 billion,” the statement read.

Ghana’s recent agreement with bilateral lenders, including China and France, played a pivotal role in unlocking the second disbursement. The government intends to allocate the newly acquired funds to support activities outlined in the 2024 budget.

In a positive development, Ghana has negotiated a moratorium with official creditors, postponing debt payments until May 2026. Plans are underway to finalize an agreement with Eurobond investors to restructure a $13 billion debt by the end of March. Finance Minister Ken Ofori-Atta has announced that payments for $5.4 billion in bilateral obligations will be staggered over 16 and 17 years.

Ofori-Atta, expressing optimism about IMF funding, cited the financial assurance under the G20 Common Framework.

Meanwhile, the World Bank has signaled its readiness to provide Ghana with an additional $300 million in budgetary support to aid the country’s economic recovery.

The World Bank’s Board of Executive Directors is set to convene next week to release this financial support, following the Official Creditors’ Committee’s agreement in principle on the major criteria for Ghana’s planned debt restructuring.