According to comments made to Reuters on Sunday by Ghana’s Minister of State in the Ministry of Finance, Mohammed Amin Adam, Ghana anticipates the International Monetary Fund (IMF) to approve a first loan tranche of $600 million as soon as Wednesday, setting the door for release within a week.
To help prop up its struggling economy, Ghana is asking the Fund for a contribution of $3 billion. On Friday, the Managing Director of the International Monetary Fund, Kristalina Georgieva, stated that Ghana’s official creditors had provided the required financing assurances for the IMF Executive Board to look into the possibility of signing off on the loan.
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“We anticipate reaching an agreement on Wednesday. “There will be $600 million as a first tranche just immediately after the approval,” Adam said by phone, adding that Ghana intended to get the funds within a week of the board’s decision. “With the disbursement, there is going to be $600 million just immediately after the approval.”
He stated that a second tranche of $600 million is expected to be authorized somewhere in November or December after a successful first evaluation of the program, with the remaining funds being released in equal tranches of $360 million after semi-annual reviews.
The cash will bolster Ghana’s coffers and assist the country in working toward the goal of having foreign reserves amounting to the equivalent of three months’ worth of imports by the year 2026, he said.
Ghana, along with some other smaller and riskier emerging countries such as Sri Lanka and Zambia, is facing the prospect of a debt restructuring as a result of its already tight finances collapsing under the weight of the economic consequences of COVID-19 and Russia’s invasion of Ukraine.
According to statistics provided by the government, restructuring plans have been established for a debt amounting to approximately $5.4 billion owed to official creditors, in addition to $14.6 billion owed to private offshore creditors.
Adam stated that once the International Monetary Fund gives its approval for the loan, he anticipates successful negotiations with both groups of creditors.
“Confidence is going to be restored, and we expect that stakeholders will cooperate and will be encouraged to negotiate favorable terms with us,” he said, adding that the date for negotiations had not yet been established for either group.
“Confidence is going to be restored, and we expect that stakeholders will cooperate and will be encouraged to negotiate favorable terms with us,” he said.
In its effort to restore macroeconomic stability and bring an end to its worst economic crisis in a generation, which has fueled protests over the rising cost of living, Ghana has also turned to the World Bank for assistance.
Adam said that the government was very far along in negotiations with the World Bank to offer extra financing of $900 million to be disbursed in three equal payments of $300 million over the course of three years. Adam added that the government was very close to reaching an agreement.
“We are far advanced and are almost concluding negotiations,” he remarked. “We are almost there.”
In addition, the World Bank has consented to provide $250 million to a financial sector stability fund in order to assist Ghana in addressing the insolvency and liquidity difficulties that have arisen as a result of a domestic debt swap program, which has had an effect on some domestic banks.
Adam reported that the administration was also having discussions with the African Development Bank regarding more than one hundred million dollars for the stability fund.
