Ghana secures $370m staff-level agreement with IMF
Ghana secures $370m staff-level agreement with IMF
The International Monetary Fund (IMF) and the Government of Ghana have reached a staff-level agreement on the fourth review of Ghana’s three-year Extended Credit Facility (ECF)-supported program, setting the stage for the disbursement of approximately US$370 million in financial support once the IMF Executive Board gives its approval.
The agreement was reached following a two-week IMF mission to Accra, led by Mission Chief Stéphane Roudet, from April 2 to April 15, 2025. The ECF program, which was approved in May 2023, provides Ghana with a total of SDR 2.242 billion (around US$3 billion) over 36 months.
“IMF staff and the Ghanaian authorities have reached a staff-level agreement on the fourth review of Ghana’s economic program under the Extended Credit Facility arrangement. This staff-level agreement is subject to Executive Board consideration. Upon completion of the Executive Board review, Ghana would have access to SDR 267.5 million (about US$370 million), bringing the total IMF financial support disbursed under the arrangement, since May 2023, to SDR 1,708 million (about US$2,355 million).”
Mr. Roudet highlighted that Ghana’s economic growth in 2024 exceeded expectations, largely driven by strong performance in the mining and construction sectors. Additionally, the country’s external sector has improved considerably due to increased exports, particularly of gold, and a surge in remittances.
“Growth in 2024 was higher than expected, underpinned by strong mining and construction activity. The external sector has seen a considerable improvement, driven by solid exports, particularly gold and to a lesser extent oil, and higher remittances. As a result, international reserves accumulation has far exceeded the ECF-supported program targets.”
However, the mission also revealed that program performance deteriorated significantly toward the end of 2024, largely due to fiscal slippages in the lead-up to the general elections. This led to the accumulation of government payables, inflation overshooting targets, and delays in several critical reforms.
“Notwithstanding these achievements, overall performance under the IMF-supported program deteriorated markedly at end-2024. Preliminary fiscal data point to slippages in the run-up to the 2024 general elections, on account of a large accumulation of payables. Inflation exceeded program targets. Several reforms and policy actions were delayed across the fiscal, financial, and energy sectors.”
In response, Ghana’s new administration has introduced corrective measures, including a tighter 2025 budget and reforms in public financial management to restore momentum.
“Against this backdrop, the new authorities have taken bold measures to address policy slippages and ensure the program objectives remain within reach. On the fiscal front, the government has launched an audit of the payables to firm up the size and nature of the slippages. Based on preliminary estimates of new payables, the primary balance posted a deficit of some 3¼% of GDP (compared to a targeted surplus of ½% of GDP). To address these slippages, the authorities have enacted a 2025 budget that targets a 1½% of GDP primary surplus and adopted several public financial management reforms. The latter includes an enhanced fiscal responsibility framework and new rules to tighten expenditure commitments.”
The IMF also engaged with Ghanaian authorities on tackling structural weaknesses in public financial management, procurement systems, and ensuring the protection of vulnerable populations affected by inflation and fiscal adjustments.
“Discussions with the authorities centered on possible additional measures needed to address structural weaknesses in the public financial management and procurement systems, as well as steps to ensure fiscal execution remains consistent with program objectives. Engagement with the authorities also focused on measures aimed at strengthening key social protection programs to cushion the most vulnerable from the impact of high inflation and ongoing policy adjustment.”
To combat rising inflation, the Bank of Ghana has raised its policy rate and adjusted liquidity operations, which the IMF says will support broader economic stabilization.
“The Bank of Ghana has recently increased its policy rate and is reviewing its liquidity management operations. The ensuing tightening in the monetary policy stance, together with the ongoing fiscal consolidation, is expected to bring inflation down.”
On structural reforms, the government has recommitted to efforts aimed at improving transparency and governance, with emphasis on State-Owned Enterprises (SOEs) in the gold, cocoa, and energy sectors.
“The mission also engaged the authorities on their wide-ranging structural reform program, with a focus on enhancing governance and transparency and strengthening State-Owned Enterprises management in the gold, cocoa, and energy sectors. On the latter, the resumption of quarterly electricity tariff adjustments, combined with structural reforms, will help reduce the energy sector shortfall and stop the accumulation of new arrears. Financial stability is being maintained as recapitalization progresses and the authorities are committed to strengthening public banks.”
The IMF also welcomed Ghana’s ongoing progress in restructuring its public debt. This includes recent advancements under the G20 Common Framework, where Ghana’s Official Creditor Committee has signed a Memorandum of Understanding.
“Ghana remains committed to completing its comprehensive public debt restructuring to restore sustainability. The Memorandum of Understanding (MoU) with Ghana’s Official Creditors Committee (OCC) under the G20 Common Framework has been signed by all parties, and the focus is now on finalizing the bilateral agreements to implement the MoU. The authorities are also pursuing good-faith efforts in reaching an agreement with other commercial creditors on a debt treatment that is in line with program parameters and the comparability of treatment principles.”
During the mission, IMF staff held discussions with key stakeholders, including Finance Minister Dr. Cassiel Ato Forson and Bank of Ghana Governor Dr. Johnson Asiama.
