The Minister of Finance has expressed confidence within the nation’s financial restoration trajectory, following Worldwide Financial Fund (IMF) approval of the second evaluate below its US$3billion Prolonged Credit score Facility (ECF) association.
“I’m assured that our economic system is actually on the trail of sustained restoration, and we’ll proceed to work tirelessly to make sure sustainable progress and prosperity for all Ghanaians,” Dr. Mohammed Amin Adam stated at a joint media briefing in Accra.
The IMF’s approval, introduced on June 28, 2024, permits for a right away disbursement of US$360million to Ghana, bringing the entire disbursements below the association to US$1.6billion. This improvement marks a big step within the nation’s financial reform programme, which started in Could 2023.
Dr. Adam highlighted a number of key achievements which have bolstered Ghana’s financial outlook. In June 2024, the nation reached agreements on debt restructuring with each official collectors and Eurobond holders.
“We’ve reached an settlement with OCC on the restructuring of US$5.1billion, which is able to result in debt service aid of US$2.8billion between 2023-2026,” he defined.
Moreover, an settlement with Eurobond holders on restructuring US$13.1billion is predicted to end in a debt cancellation of US$4.7billion and supply debt service aid of US$4.4billion over the identical interval.
The finance minister emphasised authorities’s dedication to fiscal consolidation, even in an election yr. “We’re dedicated to enhancing home income mobilisation and tightening expenditure dedication controls to keep away from coverage slippages,” Dr. Adam assured.
This dedication aligns with the IMF’s observations, as famous by Stéphane Roudet – the IMF Mission Chief for Ghana, who confirmed that the nation’s main fiscal steadiness improved by over 4 p.c of GDP final yr.
Mr. Roudet praised Ghana’s progress, stating: “Ghana’s financial reform programme is delivering on its aims. Following acute financial and monetary pressures in 2022, the Fund-supported programme has offered a reputable anchor for presidency to regulate macroeconomic insurance policies and implement reforms to revive macroeconomic stability and debt sustainability”.
The indicators are that the IMF’s evaluation of the nation’s efficiency below the programme has been largely constructive.
Mr. Roudet famous that each one quantitative efficiency standards for the second evaluate and nearly all indicative targets had been met. He additionally acknowledged the progress made on key structural reforms, regardless of some delays.
The Financial institution of Ghana’s function in sustaining a prudent financial coverage stance was recognised as essential within the nation’s financial restoration.
In accordance with Mr. Roudet, this has contributed to a speedy discount in inflation and steps to rebuild worldwide reserves. The central financial institution has additionally taken measures to protect monetary sector stability, together with guaranteeing the implementation of banks’ recapitalisation plans.
Dr. Adam outlined some distinctive options of Ghana’s debt restructuring course of, together with its completion in document time and the truth that it marks the primary time a world debt restructuring has been commenced and accomplished by the identical administration.
He said: “Whereas the restructuring course of has been difficult, we intentionally selected to implement an financial reset – recognising that beginning anew within the post-COVID-19 pandemic and international inflation period would supply Ghana with the very best alternative to attain sustainable progress and improvement”.
Whereas the general outlook is constructive, each the finance minister and IMF consultant cautioned about potential challenges.
Mr. Roudet famous that whereas the medium-term outlook is beneficial, it’s topic to draw back dangers; together with these associated to the upcoming basic elections.
The IMF emphasised the significance of sustaining macroeconomic coverage adjustment and reforms to completely restore stability and debt sustainability.
He said: “Trying forward, sustaining macroeconomic coverage adjustment and reforms is crucial to completely and durably restoring macroeconomic stability and debt sustainability – particularly in the course of the upcoming electoral interval -while fostering a sustainable improve in financial progress and poverty discount,” he said.
Dr. Adam acknowledged the help of bilateral and multilateral companions, together with the OCC, IMF, and World Financial institution, who offered monetary help and facilitated the restructuring course of. He prolonged gratitude to bondholders for his or her constructive engagement and to Ghana’s OCC co-chairs, China and France, for his or her management and help.