Ghana Gets Green Light For IMF Executive Board Approval for 600 million Dollars 10th January 2024

The Government of Ghana has received the term agreement from the Official Creditor Committee, paving the way for the IMF executive board to release the second tranche of the 3 billion dollar extended credit facility of 600 million dollars.

The Minister of finance, Ken Ofori-Atta confirmed to Bloomberg that a term sheet was expected on Tuesday 9th January, 2024.

“We are receiving the draft term sheet today so I think we are about done,” Ofori-Atta said. “We will look into the details, but then it’s good enough for the IMF to continue with their work, so we’re in good shape.”

⁠An agreement in principle is enough for Ghana to go to the IMF Board to seek approval of the 6th October 2023 Staff Level Agreement (SLA) for the first review under the $3 billion ECF program. IMF Board approval will, within days, unlock the second disbursement of $600million.

IMF Africa Director, Abebe Selassie in October, lauded Ghana’s remarkable progress and affirmed that Ghana had done its part.

“I have to tell you that whereas it took something like nine months or more for Zambia to get the official creditor committee to be created, in Ghana’s case, it was fairly rapid.”

He added, “Ghana has done its fair share and it’s for the creditors to take steps.”

IMF’s Resident Representative for Ghana, Leandro Medina, said that discussions between Ghana and official creditors were showing “promising progress.”

IMF Board approval is expected to further “trigger” World Bank Funding to the tune of $550 million. The Bank has pledged $300 million in budgetary support and another $250 million toward Ghana’s Financial Stability Fund. These funds are all expected before the end of February 2024, with a strong and positive effect expected on Ghana’s reserve position and exchange rate stability.

Ghana’s sovereign international dollar bonds also rose on Tuesday after a report that the government expected to receive a draft term sheet from its official creditors to restructure $4.5 billion of debt.

Ghana embarked on restructuring most of its public debt in December 2022.

Public debt — excluding loans to state-owned enterprises — dropped to 66.4% of GDP at the end of September 2023 in part due to the completion of a domestic debt reorganization.