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IMF to disburse US$360m third tranche to Ghana without creditors MoU

First Deputy Managing Director Gita Gopinath, Managing Director Kristalina Georgieva, IMFC Chair Saudi Finance Minister Mohammed Al-Jadaan and Finance Minister of Spain Nadia Calvino attend the IMFC Plenary during the 2024 Spring Meetings of the World Bank Group and International Monetary Fund in Washington on April 19, 2024. IMF Photo / Lewis Joly

Mr Abebe Aemro Selassie, Director, African Department, International Monetary Fund (IMF), says Ghana will receive its next funding support from the IMF even if it is unable to sign a final debt pact with its official bilateral creditors.

This means that the country would receive its third tranche of US$360 million when the IMF Board meets in June 2024 on the country’s second review programme, even without reaching an agreement with the creditors.

Ghana reached a staff-level agreement on its second review with the IMF mission team last Saturday, April 13, where the team noted that the country had made “strong progress” under the loan-support programme.

It said the next step was for the country to sign a Memorandum of Understanding (MoU) with its official creditors, consistent with the terms agreed in January 2024, and in line with the programme parameters.

Nonetheless, Mr Selassie clarified that reaching an MoU with creditors would not be a prerequisite for the next disbursement, saying, “we’ve reached staff-level agreement, and that’s by far the most important component for the review.”

He was briefing the media in Washington, USA, on Friday, April 19, at the launch of the Regional Economic Outlook on Sub-Saharan Africa, as part of events for the 2024 IMF/World Bank Group Spring Meetings, monitored by the Ghana News Agency.

He said: “The government [of Ghana] is in good faith discussions with the creditors and we hope that there will be an outcome… [and] reaching that agreement is important.”

“I should add here that the fact that they’ve not reached agreement with the Eurobond holders will not prevent us from being able to provide more finance,” Mr Selassie said.

Although he could give any timeline for the country to reach an MoU with its official creditors, he stated that the country had gained a lot of certainty and confidence for disbursement of funds.

“As of now, there is no MoU with bilateral creditors, but we know that there have been intense discussions in recent weeks, and we’re very hopeful that they’ll be able to reach a deal with bilateral official creditors, but they’ve provided financial assurances,” he said.

The IMF African Director added that: “We’re not envisaging that [it] will be an issue for our ability to conclude the next review and provide the disbursement that’s pending [for Ghana].”

Talking about the effectiveness of the G20 Common Framework in assisting African countries, including Ghana on debt negotiations, Mr Selassie said the framework was yet to reach a “desirable outcome.”

He was quick to add that: “Without the common framework, we wouldn’t have made the kind of progress that we have in helping countries like Zambia, and Ghana move towards debt sustainability.”

Ghana started implementing a US$3bn three-year Extended Credit Facility (ECF) agreement with the IMF in May 2023, and has since received the sum of US$1.2bn.

This is under the country’s homegrown Post-COVID-19 Programme for Economic Growth (PC-PEG), aimed at restoring macroeconomic stability and debt sustainability, building resilience, and laying the foundation for stronger and more inclusive growth.

During the recent review, the mission team observed that the country had met most of the quantitative targets, with good progress made on the key structural reform milestones.

It also noted that the government’s policies and reforms to restore macroeconomic stability and debt sustainability while laying the foundations for stronger and more inclusive growth were generating positive results.

Source: GNA

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